Reactive acrylate rubbers with the terminal and pendent carboxyl groups have been investigated as a modifier for a room temperature curing epoxy resin. The liquid rubbers with varying molecular weights and carboxyl-functionality were synthesized by bulk polymerization of 2-ethyl hexyl acrylate using acrylic acid as a comonomer. The liquid rubbers were characterized by FTIR, C-13 NMR spectroscopic analysis, nonaqueous titration, vapor pressure osmometry, and solubility characteristics. The liquid rubbers were incorporated into the epoxy resin by the prereact method and the effect of functionality on impact properties of the modified networks were investigated. The results were explained in terms of dynamic mechanical properties and morphology analyzed by scanning electron microscope (SEM). (c) 2006 Society of Plastics Engineers