The effectiveness of polyethyleneimine (PEi) dendrimer as a novel graded-modulus interphase material in polymeric composites is discussed in the context of core (polystyrene)-shell (PEi) nanoparticles affecting the mechanical properties of epoxy. The dendrimer is grafted onto the surface of polystyrene (PS) particles via a free radical polymerization reaction of styrene monomers in a non-aqueous polar solvent with t-butyl hydroperoxide (TBHP) as initiator and mild heating. The effects of both particle loading and core/shell composition are investigated. The mechanical test results in all cases show an increase in both stiffness and fracture toughness or the ability of the polymer to resist crack growth, as opposed to the commonly seen trade-off between these properties in previously studied soft particles. SEM micrographs suggest that the crosslinks with epoxy in the dendrimer network, leading to a dramatic interface stretching as the core-to-shell ratio decreases, and the capability of the dendrimer to 'harden' PS particles by diverting cracks through them are responsible for the enhancements.