Polyhedral oligosilsesquioxane (POSS)-reinforced thermosets based on octaglycidyl epoxy polyhedral oligosilsesquioxane cured with 4,4Ј-diaminodiphenyl sulfone (DDS) were prepared and studied for their cure, thermomechanical, and microstructural characteristics. Particular attention was paid to nanometer-scale deformation processes responsible for toughening, as revealed by transmission electron microscopy (TEM) in conjunction with the thermal properties. A cure analysis investigated with calorimetry and rheometry showed a significant dependence of the cure mechanism and kinetics on the DDS content, but all hybrid thermosets reacted completely below 300°C into rigid solids. A dynamic mechanical analysis of this hybrid resin system showed that increasing the DDS concentration used during cure increased the dynamic storage modulus in the glassy (temperature Ͻ glass-transition temperature) and rubbery (temperature Ͼ glass-transition temperature) states, simply through an increase in the crosslink density. The phase structures revealed by TEM with selective POSS staining were drastically affected by the DDS concentration and manifested as altered nanomechanical deformation structures. It was qualitatively found that the main toughening mechanism in the studied POSS-reinforced thermosets was void formation at the nanometer scale, possibly templated by limited POSS aggregation. As the crosslinking density increased with the DDS concentration, microshear yielding between voids prevailed, providing a balance of stiffness, strength, and toughness.