A novel amphiphilic polystyrene-block-polyglycolic acid three-arm star copolymer (PS-b-PGA)3 was incorporated in epoxy thermoset to show reaction-induced microphase separation. The diblock copolymer was prepared by atom-transfer radical polymerization followed by chain end modification, and toward the end ring-opening polymerization was utilized to attach the polyglycolic acid moiety. The formation of polystyrene-block-polyglycolic acid was confirmed by using Fourier transform infrared analysis, gel permeation chromatography, and 1H NMR. The microphase separation of block copolymer resulted in the formation of ordered nanodomains in the epoxy thermoset. It was found that the block copolymer in epoxy thermoset displayed reaction-induced microphase separation behavior as evidenced by transmission electron microscopy, scanning electron microscopy, and atomic force microscopy. The tensile strength and the toughness of the thermoset were increased by the incorporation of PGA, which has high glass transition and melting temperatures.