Abstract: This invention relates to a hybrid phenolic/polysiloxane resin derivable by (A) reacting a phenolic compound with (a) a siloxane polymer or (b) an aldehyde and (B) reacting the reaction product of stage (A)(a) with an aldehyde, or, (A)(b) with a siloxane polymer to form the hybrid phenolic/polysiloxane resin, said resin having a siloxane content of 1-40% by weight of the total hybrid resin and a viscosity in the range of 100-10000 mPa s. The products derived from the hybrid resins of the present invention have enhanced impact strength; can tolerate higher burst pressures in pipe applications, have improved resistance to hydrolysis and other environmental weathering characteristics; have improved fire stability; and show improved film flexibility in coatings.