Compared with traditional wet ball milling, exfoliation of graphite (GT) via dry ball milling takes less time to prepare graphite nanosheets, does not require any solvent, and is environmentally friendly and low energy consumption. In this paper, graphite nanosheets was obtained via in situ peeling of graphite in the presence of solid diluents, polystyrene (PS) and maleic anhydride-g-(styrene-ethylene-butadiene-styrene) (SEBS-g-MAH). The solid diluents (PS and SEBS-g-MAH) can form strong interfacial interactions with the GT surface. Then, PS composites were prepared by melt blending and micro-injection, and the effects of the morphological structure and dispersion state of fillers in the matrix on the thermal conductivity and mechanical properties of PS composites were analyzed. Compared with non-ball milled GT, the graphite nanosheets have stronger interfacial interactions with the matrix and are more uniformly dispersed in the PS matrix with oriented arrangement, the thermal conductivity of PS composites is increased by 27.5%, and the notched impact strength is increased by 14.9%.