Epoxy resin networks have been modified with block copolymer of polybutadiene and bisphenol A diglycidyl ether (DGEBA)-based epoxy resin. Block copolymers prepared from isocyanate-terminated polybutadiene (NCOPBER) resulted in cured transparent epoxy networks with no discernible phase-separated morphology, as indicated by scanning electron microscopy. Epoxy resin modified with block copolymer derived from carboxyl-terminated polybutadiene (CPBER) presented an opaque aspect with dispersed rubber particle diameters in the range of 0.5-3mum. This value is substantially smaller than that found in epoxy matrix modified with hydroxyl-terminated polybutadiene. The different morphological characteristics observed in these modified systems were attributed to the different times to achieve the gelation (gel time) and also to the different structures of the block copolymers. The visual homogeneity of the NCOPBER block copolymer-modified network cannot be attributed to the presence of dissolved rubber, since the glass transition temperature of the epoxy matrix (determined from dynamic mechanical analysis) has not been substantially influenced by the presence of this block copolymer. The epoxy resin modified with the different block copolymers presented an improved impact resistance. The best mechanical performance in terms of flexural and tensile properties was achieved with the block copolymer derived from carboxyl-terminated polybutadiene, whereas a more flexible material has been obtained with NCOPBER block copolymer-modified network. (C) 2003 Elsevier Ltd. All rights reserved.