A new kind of lower-branched liquid crystalline polyester (LLCP) containing polyester mesogenic units was synthesized by p-hydroxybenzoic acid, terephthalyl chloride and trimellitic anhydride (TMA), then was used as collaborative modifier for the epoxy resin (E-51) with γ-azyl polyhedral oligomeric silsesquioxane (POSS). The experimental results showed that the LLCP / POSS could act as an effective toughening modifier for the epoxy resin. The impact strength of the composites modified with LLCP and POSS was 1.1 times higher than that of the unmodified system. The temperature of starting decomposition and maximum decomposition rate improved about 20 oC and 13 oC , respectively.