Flyash, a waste product generated in large quantities in thermal power plants, has been posing problems of disposal. The purpose of the present work was to make a meaningful utilization of flyash as filler in neat epoxy resin matrix and 2% Polybutyleneterepthalate (PBT)/epoxy blend matrix. For this purpose, the tensile, flexural, compression, impact, chemical resistance, and water absorption properties were studied. Composites were made with varying proportion of flyash in epoxy resin and 2% PBT/epoxy blend matrix. Tensile, flexural, and compression properties were measured on a computerized universal testing machine, according to ASTM procedures. Impact strength was determined using izod impact tester for un-notched specimens. PBT (2%)/epoxy blend matrix composites showed improved mechanical properties over neat epoxy flyash composites. All the composites were found to have good chemical resistance toward acids, solvents, and alkalies. These composites showed better water resistance over neat epoxy flyash composites.