Epoxy asphalt is a thermosetting paving material that can provide higher strength, stiffness, adhesion, high-temperature stability, and service life comparing to conventional asphalt. However, it has not been widely used on highway pavements, primarily due to the higher initial cost and limited operational window.In this paper, dilution of epoxy asphalt with SBS-modified asphalt was studied for the potential use for chip seal application. Performances such as workability, hardening process, uncured and fully-cured bond strength, fully-cured binder performance in both high and low temperatures were also investigated thoroughly. It was found that the diluted epoxy asphalt has higher initial adhesion feature and help provide a quicker opening to traffic after construction than the undiluted epoxy asphalt. Meanwhile, epoxy asphalt in the blend can enhance the final adhesive strengths to retain the chips under strain induced by vehicles in the long-term. The dilution level in 1:0.5 and 1:1 ratios showed a faster polymerization/curing rate than the 1:2 and 1:3 ratios.The diluted epoxy asphalt shows improved low-temperature performance compared to pure epoxy asphalt and better high-temperature performance compared to pure SBS-modified asphalt. Overall, this paper presents dilution of epoxy asphalt with SBS-modified asphalt could have significant practical benefits, and the 1:1 dilution ratio seems to be the most suitable one from the aspects of performance, cost and practical use.