Atomic force microscopy (AFM) is employed to study the amine-terminated poly (butadiene-co-acrylonitrile) (ATBN) rubber-modified polybenzoxazine resin. Topographic mapping of the fracture surface is performed in conjunction with lateral force microscopy (LFM) and force-distance curve measurements (F-d). Matrix T-g reduction is attributed to the dissolved rubber and the increased mechanical damping (tan delta) is derived from the phase-separated rubber. Saturation of the rubber in the matrix is defined at 6 wt% above which the matrix T-g is not influenced upon rubber loading. The solubility limit of the reactive rubber in the matrix phase is determined from the fractured surface using LFM. The torsional force analyzed in the matrix phase increases upon the addition of rubber and levels off at 6 wt%. The results provide a direct correlation between bulk properties acquired by DMA and fractured surface probed by AFM. The presence of interphase between the separated rubbery domain and the continuous matrix phase is confirmed and its thickness is quantified from F-d curves. Moreover, it is found that interphase properties exhibit a strong rubber-concentration dependence.