In order to give a toughness and improve adhesion properties of the cured epoxy system, modified epoxy resins, which have prereacted urethane microspheres formed using dynamic vulcanization method in liquid diglycidylether of bisphenol A, were prepared. It was found that the size of the particles decreased to sub-micro order with increase in solubility of urethane oligomers in epoxy resin, and coefficient of variance in the particle size distribution resulted in less than 15%. Fracture energy G(1c) of the cured system was highly improved. Lap shear strength and peel strength were also im roved. These mechanical and adhesion properties do not depend on any curing condition of epoxy resin because of the existing stable particles in the epoxy resin before curing.