An epoxy resin based on nonglycidyl ether and varying content of carboxyl-terminated (poly)butadiene acrylonitrile copolymer was cured using an aromatic amine hardener. The ultimate aim of the study was to modify the brittle epoxy matrix by the liquid rubber to improve toughness characteristics. Fourier transform infrared spectroscopic analysis of the modified was performed to understand the structural transformations taking place during the uncured and cured stage of the modified systems. The decreasing trend in exothermal heat of reaction with increasing rubber content in the epoxy resin can be explained by the fact that the increase of carboxyl-terminated butadiene acrylonitrile copolymer (CTBN) modifier might induce a high reactivity of the end groups with the epoxide ring and resulting shorter curing times and, hence, the faster curing process than the unmodified resin. Tensile strength, impact strength, and elongation-at-break behaviors of neat as well as modified networks have been studied to observe the effect of rubber modification. Blends sample exhibits better properties as compared to pure epoxy resin in terms of increase in impact strength and elongation-at-break of the casting and gloss, scratch hardness, adhesion, and flexibility of the film. The improvement in these properties indicate that the rubber-modified resin would be more durable than the epoxy based on di glycidyl ether of bis-phenol-A and other epoxies. The films of coating based on epoxy with 15 wt % CTBN offered the maximum resistance toward different concentrations of acids, alkalies, and solvents as compared to the cured films of other blend samples. The thermal stability of the cycloaliphatic-based epoxy resin was increased with the addition of 15 wt % CTBN in epoxy matrix. Cycloaliphatic-based epoxy network modified with CTBN displayed two phase separated morphology with dispersed rubber globules in the matrix resin, i.e., they revealed the presence of two phase morphological features. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 114: 2769-2776, 2009