Abstract: Liquid rubbers that are ordinarily immiscible in liquid thermoset resins can be made miscible by the addition of at least one non-functional aromatic end-group to the polymer chains of such liquid rubber compositions. Processes for preparing such new liquid rubber compositions and miscible rubber/resin blends are also provided. In addition, these new liquid rubber compositions can be controlled to phase separate into rubbery microdomains upon curing of thermoset resins, including unsaturated polyester thermoset resins. The resulting new composite materials are found to improve the fracture toughness of cured thermoset resins while maintaining dimensional and heat resistance.