Hepta(3,3,3-trifluoropropyl) polyhedral oligomeric silsesquioxane (POSS)-capped poly(N-isopropylacrylamide) (PNIPAAm) telechelics with variable lengths of PNIPAAm midblocks were synthesized by the combination of reversible addition-fragmentation chain transfer polymerization (RAFT) and the copper-catalyzed Huisgen 1,3-cycloaddition (i.e., click chemistry). The POSS-capped trithiocarbonate was synthesized and used as the chain transfer agent for the RAFT polymerization of N-isopropylacrylamide. The organic-inorganic amphiphilic telechelics were characterized by means of nuclear magnetic resonance spectroscopy (NMR) and gel permeation chromatography (GPC). Atomic force microscopy (AFM) shows that all the POSS-capped PNIPAAm telechelics exhibited microphase-separated morphologies, in which the POSS terminal groups were self-assembled into the microdomains and dispersed into the continuous PNIPAAm matrices. The POSS nanodomains could behave as the physical cross-linking sites and as a result the physical hydrogels were formed while these POSS-capped PNIPAAm telechelics were subjected to the solubility tests with water. These physical hydrogels possessed well-defined volume phase transition phenomena and displayed rapid reswelling and deswelling thermoresponsive behavior compared to control PNIPAAm hydrogel.