The fracture behavior of a bisphenol A diglycidylether (DGEBA) epoxy, Araldite F, modified using carboxyl-terminated copolymer of butadiene and acrylonitrile (CTBN) rubber up to 30 wt%, is studied at various crosshead rates. Fracture toughness, K-IC, measured using compact tension (CT) specimens, is significantly improved by adding rubber to the pure epoxy. Dynamic mechanical analysis (DMA) was applied to analyze dissolution behavior of the epoxy resin and rubber, and their effects on the fracture toughness and toughening mechanisms of the modified epoxies were investigated. Scanning electron microscopy (SEM) observation and DMA results show that epoxy resides in rubber-rich domains and the structure of the rubber-rich domains changes with variation of the rubber content. Existence of an optimum rubber content for toughening the epoxy resin is ascribed to coherent contributions from the epoxy-residing dispersed rubber phase and the rubber-dissolved epoxy continuous phase. No rubber cavitation in the fracture process is found, the absence of which is explained as a result of dissolution of the epoxy resin into the rubber phase domains, which has a negative effect on the improvement of fracture toughness of the materials. Plastic deformation banding at the front of precrack tip, formed as a result of stable crack propagation, is identified as the major toughening process.