This paper reports on an approach to enhance the toughness of shape memory epoxy by using polypropylene glycol diglycidyl ether (G) as the toughening agent. The mechanical properties and shape memory behavior of the toughened resin systems with different loading level of G were studied, respectively. Results of the torsional braid analysis (TBA) test indicated that G had good compatibility with the epoxy resin matrix and induced a decrease in the glass transition temperature, Tg, of the toughened systems when compared to that of the neat resin system; and the decrease in Tg scaled with the content of G added in the system. Impact strength tests showed that the impact strength was improved significantly by adding G into the resin system and it increased by a factor of 13.7 for the system with 13 wt.% content of G. In addition, the toughened systems were found to yield during the impact strength test whereas brittle fracture occurred for the neat epoxy resin system; this behavior could be further confirmed by the results of scanning electron microscopy (SEM). In the shape memory behavior tests, strain fixity ratio reached as high as 98.9% for toughened systems with 7, 9, 11, 13, and 15 wt.% of G. Toughened systems also displayed changed shape recovery behavior that was comparable with that of the neat epoxy resin system during shape memory process.