Phenol-based novolac resins were synthesized with different mole ratios of phenol-to-formaldehyde. These novolac resins were epoxidized with molar excess of epichlorohydrin at 120 °C in basic medium. Novolac and epoxy novolac resin were characterized by FTIR, NMR and GPC analysis. Molecular weight was found to be 838. The epoxidized novolac resins were separately blended with different weight ratios of carboxyl-terminated polybutadiene liquid rubber ranging between 0-25 wt % with an interval of 5 wt %. All the blends were cured at 150 °C with 40 wt % polyamide. The cured films of blend samples were checked for use them in coating applications.