Vinyl siloxane (VS) modified cresol novolac epoxy (CNE)and cresol novolac hardener (CNH) resins are synthesized and both components are capable of further crosslinking. The reaction kinetics for both components are studied so that they can crosslink simultaneously in a designed synthesis procedure. Through careful adjustment of a triphenylphosphine dosage, the glass-transition temperature (T-g) of CNE/CNH resins can be effectively controlled. Phenomena characteristic of the existence of a diffusion-controlled reaction are also observed. The relationships between the T-g and crosslinking density for the CNE/CNH resin are explicitly revealed through gel content and swell ratio experiments. CNE/CNH resins with a higher T-g have lower equilibrium moisture uptake because of the higher fraction of free volume. The coefficient of diffusion also shows a similar but less apparent trend. The incorporation of VS incurs a 35% reduction in the equilibrium moisture uptake and a 20% reduction in the coefficient of diffusion for the modified resin. The VS-modified CNE/CNH resin possesses a lower Young's modulus and a higher strain at break than its unmodified counterpart does. This modified resin can help to alleviate the popcorning problems in integrated circuit packages, which results from hygrothermal stresses.