Thermoplastic elastomers based on polyetheresters with polyoxytetramethylene soft segments and poly(hexamethyleneterephthalate) hard segments were used to toughen anhydride-cured epoxy resins. The ratio between hard and soft segments and the crystallinity of the hard segments prepared by incorporating poly(hexamethyleneisophthalate) in the block copolymer were varied in order to examine the effect of the modifier＇s molecular architecture on morphology and mechanical properties of the resin, such as toughness, strength, and stiffness. The experimental data show that segmented polyetheresters are suitable toughening agents for epoxies. The compatibility between resin and toughener and also the mechanical properties of the modified resin depend on the ratio between the hard and soft segments. Epoxy resins blended with 10 wt % of the polyetherester exhibit an increase in toughness by 50-150%, while strength and modulus decrease by 20% or less. An optimal phase adhesion at levels between 70 and 85 wt % of soft segments in the modifier results in a maximum of toughness enhancement (by about 150%)of the resin accompanied with only a slight drop in strength and stiffness (by about 15%). The glass transition temperature is only slightly affected. (C) 2000 John Wiley & Sons, Inc. J Appl Polym Sci 76: 623-634, 2000.