ABSTRACT Epoxy resins are widely utilized as high performance thermosetting adhesives. Polyamide cured epoxies provide improved flexibility, moisture resistance, and adhesion. Moreover, Versamid could provide lower viscosity, better compatibility, and better cure profiles under adverse conditions. Thus, the use of polyamide (Versamid 125) as a curing agent and HTPB as an elastomeric rubbery modifier give this study an importance in formulating adhesives to be used in high temperature applications. A systematic study has been conducted to investigate the modification of DGEBA-based epoxy systems by the incorporation of hydroxyl-terminated polybutadiene (HTPB) as an elastomeric rubbery modifier in different proportions (0.75, 1.5, 2.5, 5, and 10% by weight) into an epoxy resin. Mechanical mixing process, accompanied with vacuum to get rid of cavitations, was employed to disperse the particles homogeneously into the resin system. Thermal and mechanical properties of the composite and the neat resin were measured with DSC, Zwick universal test machine, and Zwick durometer hardness tester. The composite shows an improvement in stress, strain, shore D hardness, flexural and compressive values. Nearly 2.5% of HTPB was quite enough to obtain a compromise of the desired mechanical and thermal properties. The detected decrease in Tg as the rubber content increases means that this modifier can enhance plasticity of the matrix. Reduction in the cross-linking density of the thermoset because of the added modifier has been confirmed and explained.