Incorporating elastic polyurethane in epoxy resin (EP) can enhance the physico-chemical properties but deteriorate the thermal stability. Poly(urethane-imide) (PUI) with a high reactive function group (-NCO), which combines the advantages of polyurethane and polyimide, was synthesized to simultaneously improve the toughness and thermal stability of epoxy resin. EP/PUI composites were prepared based on epoxy resin and poly(urethaneimide) with 4,4-diaminodiphenylmethane as the curing agent using a simultaneous polymerization method. FTIR analysis confirmed the formation of EP-g-PUI interpenetrating polymer networks via a reaction between -NCO of poly(urethane-imide) and -OH of epoxy resin. The thermal stability and mechanical properties were examined by thermogravimetric analysis (TGA), dynamic mechanical analysis (DMA) and stress-tensile method, respectively. Corresponding to the pure epoxy resin, which has three stage thermal decomposition, the resulting PUI/EP composite exhibits only one stage and has a much higher initial decomposition temperature ($323.8^{circ}C$) than that ($189.8^{circ}C$) of the epoxy resin. Moreover, the EP/PUI composite has a higher glass transition temperature, tensile strength and breaking elongation when 30 phr PUI was added. With increasing PUI content to 70 phr, the breaking elongation was 213 times higher than that of the neat epoxy resin. The morphology of these composites was also investigated further by scanning electronic microscopy (SEM) and transmission electron microscopy (TEM). The results showed that a grafted interpenetrating polymer network was formed.