To improve the toughness of silicone-modified epoxy resin, an aramid-silicone block copolymer was used as a compatibilizer. Fine silicone phases could be uniformly and stably dispersed in the epoxy matrix by the addition of the block copolymer. The relative ratio of the molecular weight of epoxy and silicone segments in the block copolymer strongly affected the effectiveness of the compatibilizer. The block copolymer which acted as a good compatibilizer was mainly concentrated in the interfacial area around the silicone phase. The main values of fracture toughness and impact strength in the silicone-modified system increased with a decrease in the diameter of the silicone phases. Their maximum value increased to about 2.0-2.5 times that of the unmodified system. Observations of the damage zone with an optical microscope revealed that the improvement in the toughness in the silicone-modified system is due to the increase in the area of the damage zone caused by the formation of fine silicone phases.