This comprehensive study delves into the intricate process of exfoliating and functionalizing boron nitride nanosheets (BNNSs) extracted from hexagonal boron nitride (h-BN), and meticulously explores their potential application within epoxy composites. The extensive research methodology encompasses a sequence of treatments involving hydrothermal and sonication processes aimed at augmenting the dispersion of BNNSs in solvents. Leveraging advanced analytical techniques such as Raman spectroscopy, X-ray diffraction, and FTIR spectroscopy, the study rigorously analyzes a spectrum of changes in the BNNS’s properties, including layer count variations, interlayer interactions, crystal structure modifications, and the introduction of functional groups. The research also rigorously evaluates the impact of integrating BNNSs, specifically glycidyl methacrylate (GMA)-functionalized BNNSs, on the thermal conductivity of epoxy composites. The conclusive findings exhibit notable enhancements in thermal properties, predominantly attributed to the enhanced dispersion of fillers and enhanced interactions within the epoxy matrix. This pioneering work illuminates the wide potential of functionalized BNNSs for significantly enhancing the thermal conductivity of epoxy composites, paving the way for advanced materials engineering and practical applications.