Graphene platelets are attractive nanofillers because of their 2-D structure with high aspect ratio and surface area, outstanding electrical and mechanical properties, and cost competitiveness. Due to its good compatibility with many polymers, graphene is known to improve mechanical properties, electrical conductivities, and gas barrier performance of polymers. Epoxies have been widely used as engineering plastics in industry, but low fracture and fatigue toughness limits their applications. In this study, we investigated the dispersion of graphene platelets in epoxy to produce high fracture-resistant polymer composites via in-situ polymerization. The dispersions and fracture surfaces were characterized using TEM and SEM, respectively. The mechanical properties of epoxy-graphene nanocomposites were investigated at a very low graphene fraction of 0.02 to 0.3 wt%. Also, surface-modified graphene platelets were synthesized and their effect on mechanical properties epoxy nanocomposites was evaluated. The addition of low graphene contents caused an impressive increase in fracture toughness without reduction of Young’s modulus or ultimate tensile strength. Epoxy nanocomposites exhibited an enhancement of 86% in fracture toughness (KIC) through the addition of very small amounts (less than 0.1 wt%) of graphene. Graphene sheets were observed to be well-dispersed and at various orientations within the matrix.