The use of low molecular weight liquid rubber diluents in concentrations of similar to 1%, dispersed finely in the form of submicron-sized pools, had been demonstrated in the past by Gebizlioglu and colleagues (Macromolecules 1990, 23, 3968) to be an effective source of toughening of brittle glassy polystyrene through deformation-accentuated plasticization effects of craze matter during the development of craze plasticity. Herein, we present results of a study extending the range of this plasticization effect through the development of a new "precipitation-molding" process that can routinely incorporate diluent pools of up to 4-5% by volume and can increase the tensile toughness by about a factor of 3 over what was achieved before. The experiments demonstrate that the toughening mechanism operates primarily through a substantial reduction of the craze flow stress that promotes an increase in craze plasticity that renders inactive adventitious inclusions that normally initiate fracture. Experiments with all blends at different temperatures and strain rates indicate that the fracture response can be represented by a universal behavior pattern of a single thermally assisted process of fracture of craze matter where the diluent merely modulates the plastic resistance. However, the experimental results show that the sorption of the diluent that controls the plasticization effect during straining competes against the time-dependent fracture process and that the toughening effect decreases monotonically with increasing strain rate and decreasing temperature that limits the effectiveness of the process to a range considerably below what is required for impact response.