N-Phenylmaleimide (PMI)-N-cyclohexylmaleimide (CMI)-styrene (St) terpolymers were used to improve the touchness of bisphenol-A diglycidyl ether epoxy resin cured with p,p′-diaminodiphenyl sulfone (DDS). The terpolymers were effective as modifiers for toughening of the epoxy resin system. The most suitable compositions for the modification of the epoxy resin were inclusion of 10 wt% of the terpolymer (45 mol % PMI, 5 mol % CMI, and 50 mol % St units) with Mw higher than 247,000, which led to ca. a 140% increase in the fracture toughness (KIC) of the cured resin with a medium expense of mechanical properties. The glass transition temperatures of the modified resins were equal to or higher than that of the parent epoxy resin. The morphologies of the modified resins were dependent on the terpolymer molecular weight and concentration. On addition of 5 wt % of the terpolymer (Mw 400,000), the modified resins had two-phase morphologies and the terpolymer-rich dispersed particles in the epoxy matrix. On addition of more than 8 wt % of the terpolymer, the morphologies of the cured resins changed drastically and showed a tendency to from cocontinuous phases. The toughening mechanism was discussed in terms of the morpho-logical behaviors of the modified epoxy resin systems. © 1993 John Wiley & Sons, Inc.