The objective of this study was to improve the flexibility of diglycidyl ether of bisphenol-A based epoxy resin by using a liquid rubber. For this purpose, hydroxyl terminated polybutadiene (HTPB) was used at two concentrations of 1% and 1.5% by weight. In order to improve compatibility between liquid rubber and epoxy, a silane coupling agent (SCA) was also used. Bending test specimens were moulded by using four different orders of mixing of HTPB with SCA and hardener to investigate the compatibility of HTPB and epoxy matrix. Three-point bending tests indicated that the specimens containing HTPB rubber had higher flexibility than neat epoxy specimens. Moreover, liquid rubber modification resulted in increased plastic strain at failure due to the possible decrease in crosslinking density with the change in reactions path. Fractographic examinations under scanning electron microscope indicated the formation of rubber domains in the epoxy matrix. The deformed rubber domains and increased incidence of deformation lines, especially in the third and fourth group specimens, assessed the improvement in flexibility. (C) 2002 Society of Chemical Industry.