Liquid natural rubber of different molecular masses L-LNR, and H-LNR were subjected to varying degree of epoxidation (L-ELNR-10, L-ELNR-20, L-ELNR30, L-ELNR-40, L-ELNR-50, H-LNR-20, and H-LNR-50) and the products were incorporated into PVC at various compositions by the solution blending method. These blend systems were subjected to tensile testing, tensile impact measurements, and SEM studies. It was observed that blends with L-ELNR-20 showed highest impact strength modification, followed by L-ELNR-10 and L-ELNR-30. High impact properties showed by these blends are attributed to the optimum level of compatibility existing between the blend components. Tensile impact fracture studies revealed that the failure pattern for this blend system is intermediate between the brittle fracture of rigid PVC and ductile fracture of PVC/L-ELNR-50 samples. Blends up to 30 mol % of epoxidation showed partially compatible heterogeneous nature exhibiting domain morphology. Blends of liquid rubber with higher degree of epoxidation showed deterioration in tensile strength, modulus, yield strength, and tensile impact strength due to plasticization of PVC caused by the higher polar interaction between PVC chains and the oxirane rings. Effect of ELNR molecular weight was studied and it is found that the impact modification is higher for the L-ELNR blends compared to the H-ELNR blends. (C) 2008 Wiley Periodicals, Inc. I Appl Polym Sci 111: 48-56, 2009