A highly ordered poly(dimethyl siloxane)-poly(glycidyl methacrylate) (PDMS-PGMA) reactive diblock copolymer was synthesized and used to modify bisphenol A-type epoxy resin (ER). The PDMS-PGMA block copolymer consisted of epoxy-miscible PGMA blocks and an epoxy-immiscible PDMS block. The PGMA reactive block of the block copolymer formed covalent bonds with cured epoxy and was involved in the network formation, and the PDMS block phase separated to give different ordered and disordered nanostructures at different blend compositions. The solvent cast PDMS-PGMA diblock copolymer showed ordered hexagonal cylindrical morphology. A highly ordered morphology consisting of hexagonal cylinders inside the lamellar morphology was observed in the cured PDMS-PGMA block copolymer. In the cured ER/PDMS-PGMA blends, a variety of morphologies including lamellar, cubic and worm-like and spherical nanostructures were detected depending on the blend composition. Moreover, the addition of this reactive diblock copolymer significantly increases the hydrophobicity and the glass transition temperature. It also improves the tensile strength and tensile ductility of the nanostructured thermosets at low diblock copolymer contents.