In solution and melting state, SiOD prepolymer was prepared by cured excess DDM with epoxy-terminated siloxane oligomers to control phase separation when DGEBA was blended with PDMS. DGEBA/SiOD prepolymer was also cured at $150^{circ}C$ for 3hrs. Mechanical and thermal properties of the cured prepolymer specimen were investigated. DGEBA/SiOD60 specimen blended SiOD prepolymer had the best flexural strength, modulus and impact strength. To show crack-formation procedure to morphology, DGEBA/DDM neat specimen was flowed homogeneously in direction of crack energy, whereas DGEBA/SiOD$(30{sim}60)$ specimen showed heterogeneously dispersed particles and scattered domain of crack energy, but DGEBA/SiOT specimen showed homogeneous phase.