New toughened poly(butylene terephthalate) (PBT) materials were obtained by melt blending with 20 wt% poly(ethylene octene) (PEO) copolymer and different levels of a difunctional epoxy resin in a twin-screw extruder followed by injection-molding. The presence of neither PEO or epoxy influenced either the phase nature of the two amorphous phases of the blends or the crystallization process of PBT, despite the slight reaction of epoxy with PBT as stated by the observed torque increases. The addition of epoxy led to a decrease in the particle size that stopped due to the concomitant viscosity increase. Supertough PBT-based blends with an impact strength more than 18-fold that of PBT were obtained without previous chemical modification of any of the blend components at 1.0 wt% epoxy contents. The interparticle distance was the parameter that controlled notched toughness in these PBT/PEO blends. The adhesion at the interphase was the parameter on which the critical interparticle distance appeared to depend. (C) 2003 Wiley Periodicals, Inc.