A carboxy terminated poly-n-(butyl acrylate, acrylic acid, acrylonitryl) (PNBA) terpolymer was used as a modifier for three high-functionality epoxy resins, (i) epoxy novolac, (ii) triglycidyl-4-aminophenol (TGPAP) and (iii) tetraglycidyl diaminodiphenyl methane (TGDDM), used as matrix materials in polymer composites. The resin and elastomer were reacted using different amine catalysts at different temperatures. The progress of the reaction between the epoxy resin and elastomer was studied extensively by Fourier transform infrared (FTIR) spectroscopy and differential scanning calorimetry (DSC). The results show that hydroxy esterification and etherification occurred during the epoxy-carboxy group reaction. The possible reaction mechanism involved is discussed on the basis of the results obtained.