The effects of an aliphatic reactive diluent on the viscosity, gel time, chemical resistance, mechanical properties, fracture toughness, microstructure and relaxations of two different epoxy resins, i.e., a bifunctional and a multifunctional epoxy, were investigated. The gel time was not significantly affected by the diluent. The modulus and ultimate strength gradually declined, while the ductility steadily increased as the diluent content was increased. The failure mode of epoxy samples under flexural test changed from brittle to much more ductile upon the progressive incorporation of diluent into the epoxy resins. The strain at break of bifunctional resin improved by 75%, while that of multifunctional resin enhanced by more than 24%. The dynamic mechanical thermal analysis (DMTA) showed that the introduction of reactive diluent into different epoxy resins reduced the storage modulus at the glassy region and significantly broadened the glass transition region of the epoxy matrices with approximately no change in the glass transition temperature. The DMTA results also indicated increased microstructural heterogeneities upon the addition of diluent to the epoxy resins as evidenced by atomic force microscopy. The fracture toughness of epoxy resins enhanced with diluent content, about 20% and 29% increase for bifunctional and multifunctional resins, respectively. This was attributed to the improved material's ductility and activation of plastic deformation in the epoxy resins upon the addition of reactive diluent.