Blends of epoxy resins based on diglycidyl ether bisphenol A (DGEBA) and phenolic resins are commonly used for advanced adhesive bonding and as matrices for high performance fiber composites. However, they suffer from brittleness and low fracture toughness. To remedy this shortcoming reactive liquid rubbers are conventionally used to enhance the epoxy and phenolic fracture characteristics which are accompanied with reduced glass transition temperature (Tg) and mechanical properties. An alternative novel route was explored to increase the epoxy-phenolic toughness by incorporating brominated epoxy (BE). The BE toughness effect is attributed to the polarity and size of the bromine atom. Experimental results showed that addition of BE enhanced the Tg and the ultimate elongation of the epoxy-phenolic blends. The fracture surface of BE containing blends displayed rough texture indicating a toughening mechanism of the blends' cross-linked network. Along with fracture morphology the thermal properties, the mechanical properties and the curing kinetics were studied. The resulting BE-DEGEBA-phenolic blends exhibited higher Tg and similar mechanical properties as DGEBA-phenolic blends. In general, the incorporation of epoxy to phenolic increased elongation and toughness at the expense of reduced heat resistance and modulus compared to the neat brittle phenolic. The curing kinetic study revealed lower activation energy of BE containing blends compared to non-BE blends, possibly related to bromine elimination at elevated temperatures catalyzing the curing reaction of the BE containing blends.