The excessively brittle diallyl isophthalate (DAIP) resin was toughened using polyarylate (PAr). The cure kinetics and appropriate cure condition were in investigated with differential scanning calorimetry. Fracture surfaces showed that phase separation occurred, resulting in a two-phase morphology. At 2 and 5 phr of PAr, spherical particles of PAr containing DAIP inclusions were obtained. Observation of tails at the rear of particles on the fracture surfaces provides some evidence for crack pinning, which resulted in a slight increase in fracture toughness. At 10 phr of PAr a co-continuous connected globular morphology was obtained, leading to a step increase in the fracture toughness by ductile drawing of the PAr. Go-continuous structure was also observed at 15 phr of PAr, and fracture toughness was increased by 1.5 times with little sacrifice in other mechanical properties. From optical and scanning electron microscopy studies on fracture surfaces, the toughening mechanism is considered to be crack path deflection and ductile drawing of PAr.