An epoxy-terminated carbosiloxane has been designed and synthesized as a modifier to improve toughness and stiffness of epoxy resins simultaneously. The modifier was rubbery in nature and possessed several epoxy groups. When co-cured with a conventional epoxy precursor, diglycidyl ether of bisphenol-A (DGEBA), it would phase separate as individual domains and thus act as a toughener. Through participating in curing reaction with its multiple epoxy groups, the cross-linking density of the system was increased and thus resulted in reinforcing of cured epoxy system. The modifier was synthesized via hydrosilylation and cohydrolysis reactions. The chemical structures of the carbosiloxane were confirmed by FTIR and 1H NMR spectra. The cured epoxy products were characterized by dynamic mechanical thermal analysis (DMTA), thermogravimetric analysis (TGA), impact strength testing, and atomic force microscopy (AFM). POLYM. ENG. SCI.,52:868-874, 2011. (C) 2011 Society of Plastics Engineers