The effects of changing matrix ductility are studied for rubber-toughened epoxy resins with modification of the rubber/matrix interfacial zone. The interfacial modification results in a large and more deformable interfacial zone, which gives rise to a further increased fracture toughness. Various microstructural parameters and the deformation and fracture behaviours of the rubber-toughened epoxy resins are quantified. Epoxy resins with moderate ductility are more effective in increasing further toughness after modification of the rubber/matrix interfacial zone. The further increased toughness results solely from the increased cavitation that arises in the modified rubber/matrix interfacial zone. On the other hand, the size of the plastic deformation zone in the vicinity of the crack tip is independent of the degree of rubber cavitation, but it is significantly increased by multiple but localized shear yielding, caused by the increase in matrix ductility. In addition, the degree of multiple but localized shear yielding is independent of the degree of cavitation in the present investigation.