Novel phenolic novolac resins, bearing maleimide groups and capable of undergoing curing principally through the addition polymerization of these groups, were synthesized by the polymerization of a mixture of phenol and N-(4-hydroxy phenyl)maleimide (HPM) with formaldehyde in the presence of an acid catalyst. The polymerization conditions were optimized to get gel-free resins. The resins were characterized by chemical, spectral, and thermal analyses. Differential scanning calorimetry and dynamic mechanical analysis revealed an unexpected two-stage curing for these systems. Although the cure at around 275 degrees C was attributable to the addition polymerization reaction of the maleimide groups, the exotherm at around 150 to 170 degrees C was ascribed to the condensation reaction of the methylol groups formed in minor quantities on the phenyl ring of HPM. Polymerization studies of non-hydroxy-functional N-phenyl maleimides revealed that the phenyl groups of these molecules were activated toward an electrophilic substitution reaction by the protonated methylol intermediates formed by the acid-catalyzed reaction of phenol and formaldehyde. On a comparative scale, HPM was less reactive than phenol toward formaldehyde. The presence of the phenolic group on N-phenyl maleimide was not needed for its copolymerization with phenol and formaldehyde.