A thermosetting resin system, based on tetraglycidyl-4,4 ′ -diaminodiphenylmethane, has been developed via copolymerization with 4,4 ′ -diaminodiphenylsulfone in the presence of a newly synthesized liquid crystalline epoxy (LCE). The curing behavior of LCE-containing resin system was evaluated using curing kinetics method and Fourier transform infrared spectroscopy. The effect of LCE on the thermal and mechanical properties of modified epoxy systems was studied. Thermogravimetric analysis indicated that the modified resin systems displayed a high T 0.05 and char yield at lower concentrations of LCE (≤5 wt%), suggesting an improved thermal stability. As determined using dynamic mechanical analysis and differential scanning calorimetry, the glass transition value increased by 9.7% compared to that of the neat resin when the LCE content was 5 wt%. Meanwhile, the addition of 5 wt% of LCE maximized the toughness with a 175% increase in impact strength. The analysis of fracture surfaces revealed a possible effect of LCE as a toughener and showed no phase separation in the modified resin system, which was also confirmed by dynamic mechanical analysis.