The impact strength and fracture behavior of rubber/polymer composites were investigated with respect to two factors: (i) characteristic ratio, $C_{infty}$ as a measure of chain flexibility of the polymer matrix and (ii) the rubber particle size in polymer blend system. In this study C was controlled by the composition ratio of polyphenylene oxide (PPO) and polystyene (PS). Izod impact test and fractographic observation of the fracture surface using scanning electron microscope were conducted. Finite element analysis were carried out to gain understanding of plastic deformation mechanism (shear yielding and crazing) of these materials. Shear yielding was found to be enhanced when the flexibility of matrix polymer was relatively low and the rubber particles were small.