Functionalizing nanoparticle surfaces is essential for achieving homogeneous dispersions of monodisperse particles in polymer nanocomposites for successful utilization in engineering applications. Functionalization reduces the surface energy of the nanoparticles, thereby limiting the tendency to agglomerate. Moreover, reactive groups on the surface can also participate in the polymerization, creating covalent bonds between the inorganic and organic phases. In this paper, a fluidized bed inductively coupled plasma (FB-ICP) reactor is used to break apart the agglomerates and functionalize commercial TiO2 nanoparticle powders in a batch of several grams. The fluidized bed could be implemented into a continuous flow reactor, potentially making this a viable method to treat larger quantities of commercial powders. The particles are treated with acrylic acid (AA) and tetraethylorthosilicate (TEOS) plasma and the functionalized particles were collected separately from bulk powder. High resolution transmission electron microscopy (HRTEM) analysis showed that the particles were coated uniformly with polymer coatings with thicknesses around a few nanometers. Fourier-transformed infrared spectroscopy (FTIR) studies of the polymer-coated particles showed the presence of different functional groups (poly-acrylic acid/siloxane) similar to that present in the bulk films. The dispersion behavior of the TiO2 nanoparticles showed much improvement with reduced agglomerate size.