A unique approach to toughening thermosets has been identified by introducing small amounts of amphiphilic block copolymer. The result is a good viscosity-Tg-toughness balance. In this paper, the fracture behavior of these modified epoxies, was carefully studied in an attempt to understand the toughening mechanisms that exist. The findings suggest that cavitation in even these nano-sized spherical micelles is the primary mechanism of toughening. These findings were also found to be a strong function of the crosslink density of the host network with higher levels of plastic deformation at the crack tip being observed in the low crosslink density systems. Glass fiber reinforced composites made with epoxies modified with these toughening agents were found to have improved fatigue resistance.