A novel polysiloxane (GxDy) containing a large number of epoxide groups and flexible segments was synthesized by hydrolysis and condensation of 3-glycidoxypropyl trimethoxysilane (GPTMS) and dimethyldiethoxylsilane (DMDES) to toughen the 3,4-epoxycyclohexylmethyl-3,4-epoxycyclohexanecarboxylate (ERL-4221). The chemical structures of GxDy (molar ratio of GPTMS to DMDES is x/y) were confirmed by Fourier transform infrared spectroscopy (FTIR), 29Si nuclear magnetic resonance spectroscopy (NMR), and gel permeation chromatography (GPC), and G4D6 have the highest degree of branching. The thermal and mechanical properties, morphologies and transmittance of the cured epoxy resins were examined by differential scanning calorimetry (DSC), thermogravimetric analysis (TGA), tensile testing, fracture testing, SEM, and UV-vis spectroscopy. The Tg of the GxDy modified epoxy depends on the structure and addition content of GxDy. The TGA results under a N2 demonstrate that the thermal stability of the epoxy resin was improved by GxDy and the Si-(O-)3 from the GPTMS part forms silica more easily than the Si-(O-)2 from the DMDES part. The addition of 10 phr G4D6 resulted in greatly improved toughness, but maintained the transmittance of the epoxy resin. In addition the morphology of the fracture surfaces showed that GxDy can be dispersed homogeneously in the epoxy resin, and the toughening follows the pinning and crack tip bifurcation mechanism. In conclusion, GxDy can increase the toughness and thermal properties of the ERL-4221 system simultaneously, and maintain its transmittance. Therefore, GxDy can be used as a toughening agent for light emitting diode (LED)-packaging epoxy resins.