The integration of three-dimensional (3D) woven spacer fabric, which links two layers of woven fabric using vertical pile yarns at the central section, offers a unique composite material with enough porosity to accommodate matrix. These materials hold great potential across a diverse range of industries, including construction, automotive, marine, and aerospace. Aerogel-embedded 3D woven spacer fabric blankets are crafted using a hand sol–gel technique followed by ambient pressure drying. Increasing the thickness of the piled spacer fabric results in a reduction in bulk density and thermal conductivity. This phenomenon may arise from the additional fibres and increased loftiness, which create more air pockets within the fabric, thereby reducing its overall weight. Furthermore, the fabricated blankets exhibit hydrophobic properties and demonstrate thermal stability up to 800 °C. This characteristic makes them suitable for applications requiring resistance to moisture and high temperatures.