In this study, the effect of hybrid reinforcement comprising silica nanoparticles (SNPs) and a blend of equal percentages of acrylamide-modified waste tire powder and polyethylene terephthalate (PET) on mechanical, thermal stability, and microstructure of the epoxy-phenolic adhesive was assessed using tensile test, TGA, and FESEM tests, respectively. To investigate the adhesion features, the formulated adhesive was applied in lap joint bonding of a stainless steel 316L to epoxy resin/carbon fiber composite. Based on the tensile test results, adding 10 wt.% modified waste tire powder- PET blend and 1 wt.% SNPs to the epoxy-phenolic adhesive increased the tensile strength, modulus, and the toughness of the dumbbell-shaped samples by 65.24%, 58.95% and 98.80% as compared with the neat epoxy-phenolic adhesive, respectively. Furthermore, the highest improvement of shear strength, modulus, and toughness in the steel-composite single lap joint was observed in the sample containing 10 wt.% modified waste tire powder-PET blend and 0.5 wt.% SNPs of 237.22%, 25.64%, and 279.66%. TGA results also indicated that the addition of 10 wt.% PET powder and 1 wt.% SNPs enhanced the initial decomposition temperature, maximum decomposition temperature, and residue char by 5.94°C, 3.64°C, and 59.45% respectively. The images of the fracture surface of the optimal samples in the tensile test showed that the debonding of nanoparticles, plastic void growth, and deviation from the main crack path are among the major mechanisms in the increase of the toughness of the samples.