A novel method based on phase inversion and inter-boundary reaction in a reactive system comprising a thermoplastic phenoxy and a thermosetting epoxy has been proposed to design micro epoxy particles with a thermoplastic polymer shell. Due to the hydroxyl group in phenoxy, inter-domain reactions were found to lead to a chemical link between the polymer and the epoxy network. As cure progressed, the phenoxy component was first expelled out of the epoxy spheres at initial stages of cure and a phase-separated morphology was set. Subsequently, the pendant -OH groups in the phenoxy shells were grafted onto the outer surfaces of the epoxy core particles (3-4 mu m) at high enough temperatures (187 degrees C or higher) during later stages of cure. This paper describes the mechanisms and fundamental phenomenon under which this unique method of preparing polymer/epoxy spheres (epoxy cores/phenoxy shell) of controlled sizes can be realized. Several factors have been found to affect the geometry of the epoxy spheres and the chemical bondings between the polymer and epoxy. (C) 1997 Elsevier Science Ltd.