Thermoset/thermoplastic elastomer (TPE) blends of poly(propylene glycol) (PPG)-type epoxy resin (ER) and a diblock copolymer, polystyrene-b-polybutadiene (SB, with 30% styrene content), were prepared using 4,4'-diaminodiphenylmethane (DDM) as curing agent. The miscibility and thermal transition behavior of DDM-cured ER/SB blends were investigated by differential scanning calorimetry (DSQ and dynamic mechanical analysis (DMA). The existence of three separate glass transitions, which are independent of the blend composition, indicates that SB is immiscible with DDM-cured ER. Neither the PS block nor the PB block exhibits miscibility with the cured ER. There exist three phases in the blends: a PS microphase, an ER-rich phase and a PB microphase. The phase structure and morphology of the ER/SB blends were studied using both scanning and transmission electron microscopy (SEM and TEM); a variety of morphologies were observed, depending on the blend composition. For the blends with 5 and 10 wt% SB, SB domains with irregular shapes and broadly distributed sizes are dispersed in a continuous cured ER matrix. For the blends with 20-60 wt% SB, interpenetrating bicontinuous phase structures are observed. For the blends with 70 wt% and more SB, a dispersion of cured ER particles in the SB matrix is obtained. The TEM observation showed that the two phases in the blends exhibit a good interfacial adhesion. The interfacial layer between the ER and SB phases varies from 100 to 300 nm for the blend with 20 wt% SB content, SB micelles are formed surrounding the SB domains in the ER matrix. Small-angle X-ray scattering (SAXS) experiments reveal that the SB diblock polymer still exhibits a lamellar microphase structure within the SB phase and the long spacing of larnellae nearly does not change in the blends. The SB diblock copolymer is microphase separated in the macroscopically phase separated ER/SB blends.