Composites made from epoxy resins (ERs) are one of the important polymer groups used in different industries due to their good mechanical and thermal properties. Many attempts have been done to improve both the mechanical and the thermal properties of ER composites and to lower the cost of ER composites with addition of inexpensive fillers such as calcium carbonate, kaolin clays, silica, talc, etc. In this study novel lateritic ore (LO) filler was used in diglycidyl ether of bisphenol A‐type ER. Different addition percentages (5–20%) of both natural LO (nLO) and modified LO (mLO) into ER were tested to determine the influence on mechanical and thermal properties of newly produced composites. Surface hardness, Young's modulus, tensile strength, elongation at break, water sorption, adhesion, and thermal stability of composites were determined and were compared with pure ER. Results showed that the addition of nLO/mLO has positive effect on mechanical and thermal properties. Morphological characterization by scanning electron microscopy and structural characterization by X‐ray diffraction revealed that addition nLO/mLO distributed homogenously throughout the composites. POLYM. COMPOS. 34:1375–1381, 2013. © 2013 Society of Plastics Engineers