The epoxide-terminated low-molecular-weight poly(phenylene oxide) (PPO), EPPO, was synthesized by modifying the terminal hydroxyl group of PPO and it was reactively blended with epoxy-novolac resin (EPN). The curing kinetics, phase morphology, thermal stability, dielectric property, and water absorption behavior of the cured EPN/EPPO blends were investigated and compared with the unmodified EPN/PPO blends. As revealed by the FTIR and DSC analysis, EPPO takes part in the curing reaction and forms a reactive blend with EPN. The curing rate of both EPN/PPO and EPN/EPPO blends first increases and then decreases with increasing the PPO or EPPO fraction. The blends have lower degree of curing than neat EPN, due to the steric hindrance effects of PPO or EPPO. Because of the reaction between blend components, EPN/EPPO blends show faster curing rate and higher degree of curing than the corresponding EPN/PPO blends. The reactive blending improves the dispersion of EPPO in EPN matrix and the EPN/EPPO blend forms a co-continuous morphology even at a low EPPO content, compared to the typical sea-island morphology of the EPN/PPO blend. The EPN/EPPO blend has remarkable smaller dielectric constant, dissipation factor, and water absorption than neat EPN. (c) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013