Poly(acrylonitrile-styrene-butadiene) (ABS) was used to modify diglycidyl ether of bisphenol-A (DGEBA) type epoxy resin, and the modified epoxy resin was used as the matrix for making multiwaled carbon tubes (MWCNTs) reinforced composites and were cured with diamino diphenyl sulfone (DDS) for better mechanical and thermal properties. The samples were characterized by using infrared spectroscopy, pressure volume temperature analyzer (PVT), thermogravimetric analyzer (TGA), dynamic mechanical analyzer (DMA), thermo mechanical analyzer (TMA), universal testing machine (UTM), and scanning electron microscopy (SEM). Infrared spectroscopy was employed to follow the curing progress in epoxy blend and hybrid composites by determining the decrease of the band intensity due to the epoxide groups. Thermal and dimensional stability was not much affected by the addition of MWCNTs. The hybrid composite induces a significant increase in both impact strength (45%) and fracture toughness (56%) of the epoxy matrix. Field emission scanning electron micrographs (FESEM) of fractured surfaces were examined to understand the toughening mechanism. FESEM micrographs reveal a synergetic effect of both ABS and MWCNTs on the toughness of brittle epoxy matrix. (C) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 127: 3093-3103, 2013