The effects of grafting level of polyethylene glycol (PEG) grafted styrene ethylene propylene styrene (SEPS) on the intrinsic brittleness of epoxy thermosets were studied. The SEPS‐g‐PEG block copolymer (BCP) was synthesized by grafting various grafting degree of PEG (i.e., 10%, 20%, 30%, and 40%) on polystyrene (PS) blocks of SEPS following Williamson ether synthesis method. A total of 10 wt% of the BCP modifiers were dispersed in epoxy thermosets. PEG side chains were miscible in the epoxy which formed a uniform BCP dispersion within the epoxy thermoset matrix. As the degree of PEG grafting was increased, the BCP phase was absorbed in the epoxy matrix. This absorption occurred because the increase in PEG grafting provided more miscible PEG chains to bind the BCP and epoxy nanostructures together. The differential scanning calorimeter and dynamic mechanical thermal analysis analyses indicated that BCP toughened epoxy exhibited an improved glass transition temperature (Tg). At a 40% PEG grafting degree in the BCP, the critical stress intensity factor (KIC) and critical strain energy release rate (GIC) increased up to 80% and 180%, respectively. This trend suggested that the energy associated with fractures could be absorbed through the deformation of the softer phases when a load was applied to them.