The poly(sily ether) with pendant chloromethyl groups (PSE) was synthesized by the polyaddition of dichloromethylsilane (DCM) and diglycidylether of bisphenol A (DGEBA) with tetrabutylammonium chloride (TBAC) as a catalyst. This polymer was miscible with diglycidyl ether of bisphenol A (DGEBA), the precursor of epoxy resin. The miscibility is considered to be due mainly to entropy contribution because the molecular weight of DGEBA is quite low. The blends of epoxy resin with PSE were prepared through in situ curing reaction of diglycidyl ether of bisphenol A (DGEBA) and 4,4'-diaminodiphenylmethane (DDM) in the presence of PSE. The DDM-cured epoxy resin/PSE blends with PSE content up to 40 wt % were obtained. The reaction started from the initial homogeneous ternary mixture of DGEBA/DDM/PSE. With curing proceeding, phase separation induced by polymerization occurred. PSE was immiscible with the 4,4'-diaminodiphenylmethane-cured epoxy resin (ER) because the blends exhibited two separate glass transition temperatures (T(g)s) as revealed by the means of differential scanning calorimetry (DSC) and dynamic mechanical analysis (DMA). SEM showed that all the ER/PSE blends are heterogeneous. Depending on blend composition, the blends can display PSE- or epoxy-dispersed morphologies, respectively. The mechanical test showed that the DDM-cured ER/PSE blend containing 25 wt % PSE displayed a substantial improvement in Izod impact strength, i.e., epoxy resin was significantly toughened. The improvement in impact toughness corresponded to the formation of PSE-dispersed phase structure. (C) 2003 Wiley Periodicals, Inc.