Structure development during the cure of epoxy resin modified with rubber or thermoplastic polymer was investigated by a Monte Carlo simulation technique. The lattice model of bond-fluctuation algorithm proposed by Carmesin and Kremer was modified to be applied to the crosslinking reaction between epoxy resin and curing agent. The entropy driven phase separation behavior was monitored by a quantity of collective structure factor and was analyzed by the Flory-Huggins theory. Even though the phase separation behavior near the critical composition of the mixture shows the spinodal decomposition irrespective of the cure rate, the phase separation mechanism at the off-critical composition is changed with the cure rate. The cure behavior seems to follow a second order reaction kinetics. As the volume fraction of added thermoplastic polymer increases, the apparent kinetic rate constant decreases at the same reactivity. This can be interpreted as a diluent effect of the added thermoplastic polymer on the cure kinetics. Also, the gelation behavior was compared with the Flory-Stockmayer branching theory.