Electrically insulating thermal interface materials (TIMs) are desired for certain applications to avoid electrical current leakage. However, it is more challenging to achieve high thermal conductivity (κ) due to the noncoalescing nature of ceramic particles. Herein, the independent control of electrical and thermal conductivity of TIMs is reported, with the aid of low-temperature coalescing silver nanoparticles (AgNPs), enhancing κ, and decreasing total thermal resistance (Rt) while retaining electrical insulation. The leakage-free functionalized phase-change material (OP) is employed as a matrix. The interaction between aluminum nitride (AlN) particles and OP induces the highest surface energy and intrinsic adhesion energy, compared with other ceramic particles, resulting in the lowest elastic modulus and Rt. The κ (1.7 W m−1 K−1) and Rt (80.1 mm2 K W−1) of the OP-AlN are further improved by the AgNP decoration (OP-AlN/Ag). The AlN particles are coalesced by the exquisitely functionalized AgNPs (3 vol%), suppressing electrical conductivity (<10−9 S cm−1). The κ is increased by 58% (2.7 W m−1 K−1) and Rt is decreased by 44% (45.0 mm2 K W−1). The independent electrical/thermal pathway control may prove useful for electrically insulating but thermally highly conducting TIMs.