In this paper, the voltage induced metal-insulator phase transition (MIT) of polyethene glycol (PEG) composite film is investigated based on VO₂ nanoparticles prepared by the hydrothermal method and vacuum annealing process. High purity VO₂ (B) nanoparticles are obtained after being treated in a hydrothermal reactor at 180 ℃ for 12 h by using vanadium pentoxide (V₂O₅) and oxalic acid (H₂C₂O₄·2H₂O) as raw materials. The X-ray diffraction (XRD) pattern shows that the prepared nano-powders are free of impurities, and the scanning electron microscope (SEM) pictures confirm that the micro-morphology is of a band-shaped nano-structure. Next, these products are heated in a vacuum quartz tube at 500 ℃ for different times. The XRD and differential scanning calorimeter (DSC) curves of the annealed samples prove that the VO₂ (M) with MIT performance is successfully prepared. And the content of M phase in the sample increases with preparation time increasing. When the annealing time is longer than 60 min, all the samples are converted into materials with M phase. The SEM images show that the average length of the nano-powders decreases with the annealing time increasing from 10 min to 300 min. Then PEG coating containing VO₂ (M) nanoparticles is applied between two electrodes with a pitch of 1 mm on printed circuit board (PCB). The V-I test is carried out after a 20 kΩ resistor has been connected in the circuit. The results display repeatable non-linear V-I curves indicating that the composite film undergoes an MIT phase transition under voltage. After it is activated for the first test, the MIT voltage and non-linear coefficient increase exponentially as the length of VO₂ decreases. Besides, it is also found that the voltage across the material is maintained at around 10 V after the resistance has changed suddenly, which is similar to the behavior of diode clamping voltage. We believe that the phase transition voltage and non-linear coefficient of the VO₂ composite film are influenced by the intra-particle potential barrier and the inter-layer potential barrier. The longer the average length of the nanoparticles, the higher the potential barrier between the interfaces in the conductive channels is, and thus increasing the phase transition voltage and phase transition coefficient. The activation phenomenon of the thin film is caused by reducing the barrier between particles during the first test. Furthermore, the results can prove that the electric field is the determinant of the phase transition during the VO₂ composite film electrical field induced MIT of the VO₂ composite film. However, after the phase transition, Joule heat plays a significant role in maintaining the low resistance state.