Bifunctional, trifunctional, and tetrafunctional epoxy (EP) resins were hardened with stoichiometric amount of 4,4'-diaminodiphenyl methane in presence and absence of benzoxazine (BOX). The EP/BOX ratio of the hybrid systems was constant, viz. 50/50 wt %. For the bifunctional EP, the EP/BOX range covered the ratios 75/25 and 25/75 wt %, as well. Epoxy-terminated liquid nitrile rubber (ETBN) was incorporated in 10 wt % in the systems with trifunctional and tetrafunctional EP, and in 10, 15, and 20 wt % in the EP/BOX with bifunctional EP to improve their toughness. Information on the structure and morphology of the hybrid systems was received from differential scanning calorimetric, dynamic-mechanical thermal analysis, atomic force microscopic, and scanning electron microscopic studies. The flexural, fracture mechanical properties, thermal degradation, and fire resistance of the EP/BOX and EP/BOX/ETBN hybrids were determined. It was found that some homopolymerized BOX was built in the EP/BOX conetwork in form of nanoscale inclusions, whereas ETBN formed micron scaled droplets of sea-island structure. Incorporation of BOX improved the charring and fire resistance, enhanced the flexural modulus and strength, reduced the glass transition (Tg), the fracture toughness, and energy. Additional modification with ETBN decreased the charring, fire resistance, flexural modulus and strength, as well as Tg, however, improved the fracture toughness and especially the fracture energy. (c) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013