Amphiphilic poly(n-butylene oxide)-b-poly(ethylene oxide) (PBO-PEO) diblock copolymers of various compositions were synthesized and studied as modifiers for epoxy resins. In blends of PBO-PEO, epoxy resin, and curing agent, the copolymers formed well-defined microstructures that persisted upon curing of the epoxy. The resulting morphologies were vesicles, worm-like micelles, and spherical micelles (in order of increasing size of PEO block), as well as transitional morphologies. Addition of 5% by weight of these block copolymers improved the fracture toughness of the epoxy by as much as 19 times with relatively small reduction in the elastic modulus. The highest level of toughness was measured in a system containing branched worm-like micelles. Close examination of the fracture surfaces of these compositions suggests that although all the dispersed morphologies played a similar role to inclusions in particle-toughened thermosets, crack deflection toughening contributed to the significantly higher levels of toughness in the worm-like micelle systems. (c) 2005 Wiley Periodicals, Inc.