A resorcinol-based epoxy resin was modified by incorporating a glassy second component. The mixture showed a heterogeneous morphology with two clearly defined phases, one phase rich in oligomer, the other phase composed mainly of resorcinol epoxy resin. The fracture toughness measured as G1c and K1c values showed an increase from 174J m-2 and 0.89 MN m-1.5 S in pure epoxy resin to 431 J m-2 and 1.36 MN m-1.5 in 30% oligomer modified resins. The scanning electron micrographs showed that the oligomer-rich phase exhibited ductile failure behaviour and formed the dispersed phase at low concentrations while it was the continuous matrix when the concentration was 30%. Optical observations on the failure mode of thin films of the oligomer-modified epoxy resin showed the existence of both inter face failure and considerable distortion in both phase. © 1987 Chapman and Hall Ltd.