The blend samples were prepared by mechanical mixing of phenol based epoxidised novolac resin with carboxylic terminated polybutadiene (CTPB) liquid rubber ranging 0-25% with an interval of 5 wt% phenol based epoxy resin was prepared by conventional procedure for the preparation of diglysidal ether bisphenol-A (DGEBA) epoxy resin in acidic medium. The novolac resin was prepared by the phenol and formaldehyde with the mole ratio 1:1.6 by using tricarboxylic acid as catalyst. Methylation of phenol was confirmed by Fourier transform infrared (FTIR) spectroscopic analysis and a reaction mechanism was proposed. The number average molecular weight was found to be 838 by the gel permeation chromatographic (GPC) technique on the basis of calculated value of kinetic chain length. The structure of the novolac type phenolic resin were cured with hexamethylene tetraamine (HMTA) confirmation of epoxidised novolac confirmed by FTIR analysis by seeing the appearance of various functional groups during the cured films of blends samples