In this paper, we have explored the potential of core-shell poly(siloxane)-epoxy microspheres towards improving the dynamic properties of a conventional unsaturated polyester (USP). Micro-sized poly(siloxane) beads were prepared by suspension polymerisation route, where the particle dimensions could be tailored by varying the operating parameters, particularly stirring speed and feed concentration. The core was subsequently coated with epoxy to form an external layer compatible with the USP resin, with an aim to aid its homogeneous dispersion in the thermosetting resin. Toughened USP composites containing varying amounts of both coated and uncoated microspheres (3-10 % w/w) were prepared by curing under ambient conditions, and their mechanical properties were evaluated under both quasi-static and dynamic loading conditions. The introduction of epoxy-coated poly(siloxane) led to a proportional decrease in the tensile strength and modulus, which were found to compare well with the predictions based on Halpin-Tsai and Lewis-Nielson empirical models. Significant improvements in the impact strength of USP could be achieved, and under optimised conditions, 101 % increase in the impact strength was observed, which corroborated with significant increase in mean critical stress intensity factor (76 %). Morphological investigations of the fractured surface revealed the presence of characteristic features which were used to establish the underlying routes responsible for the toughened nature of the USP composites.