Abstract This paper presents corrosion and abrasion resistance of an epoxy system modified by using a synthesized epoxy terminated polybutadiene (ETPB) resin with good toughening properties. The effect of this modification on the hardness, abrasion, thermal and corrosion protection performance of the resultant modified coatings was investigated. Pendulum hardness test showed that the incorporation of ETPB into epoxy matrix increased damping energy of the system. Taber experiment showed that rubber modification increased abrasion resistance of epoxy coatings. Thermal gravimetric analysis (TGA) of samples showed that the thermal resistance of ETPB modified epoxy coatings was almost the same as that for the neat one. The corrosion protection performance of rubber modified and unmodified epoxy coatings were investigated using electrochemical impedance spectroscopy (EIS) in 3.5% sodium chloride solution for a period of 90 days. EIS studies showed that both coatings remained intact with good corrosion resistance properties. Film resistance of unmodified and ETPB modified epoxy coatings after 90 days of immersion were found to be 2.59 × 10 10 Ω cm 2 and 2.70 × 10 10 Ω cm 2 , respectively. The addition of hydrophobic butadiene rubber into epoxy resin increased the water contact angle from 77° to 85°. This increment in hydrophobicity decreased the water uptake of modified epoxy coating.