Epoxy resins are widely used in a variety of applications because of their high chemical and corrosion resistance and good mechanical properties. But few types of epoxy resins are brittle and possess low toughness which makes them unsuitable for several structural applications. In this work, carbon nanofibres have been dispersed uniformly into the epoxy resin at a very low concentration (0.07 vol. %). Improvement of 98% in Young modulus, 24% in breaking stress and 144% in work of rupture was achieved in the best sample. The emphasis is on achieving uniform dispersion of carbon nanofibers into epoxy resin using a techniques such as ultrasonication, use surfactants. The fracture studied under scanning fracture mechanism of load and correlate it properties. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 118: 2276-2283, 2010