Epoxy resin is widely used for coatings, adhesives, castings, electrical insulation materials, and other applications. However, unsolved problems still remain in its applications. The main problem is low toughness: cured epoxy resin is rather brittle, with poor resistance to the propagation of cracks derived from the internal stress generated by shrinkage in the cooling process from cure temperature to room temperature. The objective of this study was to improve the flexibility and toughness of diglycidyl ether of bisphenol A based epoxy resin with a liquid rubber. For this purpose, amine-terminated polybutadiene (ATPB) was synthesized. The product was characterized by Fourier transform infrared and NMR spectroscopy and elemental analysis. ATPB-modified epoxy networks were made by curing with an ambient-temperature curing agent, triethylene tetramine. We varied the epoxy/liquid rubber compositions to study the effect of toughener concentration on the impact and thermal properties. Higher mechanical properties were obtained for epoxy resins toughened with 1 phr ATPB. (c) 2005 Wiley Periodicals, Inc.