The cationic nonlinear polymerization of diglycidyl ether of Bisphenol A (DGEBA) in the presence of a diluent gamma-butyrolactone (BL) was initiated by the BF3-4-methoxyaniline (MA) complex. The reaction was studied by size exclusion chromatography, DSC, and dynamic mechanical analysis. Reaction mechanism involves a fast formation of adducts of DGEBA with MA released from the initiator. Formation of spiro orthoesters (S) by reaction of BL with DGEBA and homopolymerization of DGEBA as well as copolymerization with S follow. Gelation occurs at 60-degrees-C within a few minutes at conversion of epoxy groups (xi(E))c = 0.20-0.45. The networks cured under optimum conditions show high glass transition temperature, T(alpha) = 178-degrees-C. The mechanism-structure-property relations are discussed.