Mechanical and fracture mechanics properties of transparent multiphase epoxy resins toughened with various amounts of compatibilized silicone liquid rubbers consisting of polycaprolactone-block-poly(dimethylsiloxane)-block-polycaprolactone triblock copolymer have been investigated. At silicone liquid rubber contents < 10 wt % significantly improved toughness has been achieved without adversely affecting thermal and mechanical properties. Fractographic and interferometric methods have been applied to study crack propagation in such silicone-modified resins.