Phase separation of organic networks derived from mixtures of reactive monomers and/or oligomers can take place through the formation of IPNs or precipitation of particles. The latter systems are widely used as a means of increasing the fracture toughness of thermosetting resins, and particularly for products obtained from mixtures of epoxy resins and functionalized aliphatic oligomers. In the present work several mixtures comprised of difunctional epoxy resins, silane functionalized perfluoroether oligomers, prehydrolyzed tetraethoxysilane, and an aromatic amine hardener were examined in a variety of compositions and preparative procedures. The aims were to control the kinetics of phase separation and the repartition of the different components in the two phases, so that the silica domains could be preferentially located within the precipitated soft particles. It was found that the silane functionalization of the perfluoroether oligomer provided an effective mechanism for the localization of the siloxane networks within the precipitated particles. However, phase separation by the precipitation of particles would only take place for systems in which the perfluoroether oligomer could be reacted with an excess of epoxy resin prior to adding the alkoxysilane solution and the hardener. Moreover, it was difficult to achieve the total localization of the siloxane component into the perfluoroether network. The siloxane species remaining dissolved in the resin gave rise to severe embrittlement of the products through reactions with the epoxy chains. Using mixtures of suitably functionalized perfluoroether oligomers it was possible to produce the conditions by which the localization of the silica domains into the precipitated particles could be maximized. This has resulted also in the formation of graded interphase regions and to a global improvement in mechanical properties, manifested as a concomitant increase in modulus, strength, and toughness. (C) 2004 Wiley Periodicals, Inc.