A finite-element model for rubber particles in a polymeric matrix has recently been proposed which is based upon a collection of spheres, each consisting of a sphere of rubber surrounded by an annulus of matrix. We have used this model to investigate in detail the stress distributions in and around a rubber particle, or a void, in a matrix of epoxy polymer. We have deduced the bulk modulus of the rubber-toughened epoxy and considered the implications of the stress distributions on the observed toughening micromechanisms. Of particular concern has been the effects of the volume fraction and the properties of the rubber phase.