Present study is carried out to understand the effect of conducting polymer, polypyrrole (PPy) on structural, morphological, ther-mal and dielectric properties of bio-compatible polymer blend film of polyvinyl alcohol (PVA) and polyvinyl pyrrolidone (PVP). The growth of PPy in the matrix of PVA–PVP was analyzed using XRD, FT-IR and SEM studies. The shifting in positions and broadening of XRD diffraction peaks of PVA–PVP-PPy from that of PVA–PVP indicates the structural modification and reduction in the crystallinity of the PVA–PVP due to incorporation of PPy. The SEM studies suggest scattered growth of PPy in PVA–PVP matrix at lower concentration of pyrrole monomer. As the monomer concentration is increased, the uniform and interconnected growth of PPy was observed in SEM micrographs. The TGA thermograms show faster thermal degradation of PVA–PVP- PPy films at lower temperature as compared to PVA–PVP films. The blend films of PVA–PVP- PPy exhibited enhanced values of dielectric constant and ac conductivity as compared to the virgin blend film which are observed to increase with increasing con-centration of PPy. The high dielectric constant with high ac conductivity exhibited by PVA–PVP-PPy film suggests its possible application as flexible dielectric material for the development of biosensors, energy storage devices in field of green organic electronics.