Short carbon fiber-reinforced composites (SCFRCs) have attracted increasing attention owing to their comprehensive performance and easy processing route. However, the imperfect interfacial adhesion and serious stress concentration at the fiber/matrix interface have hampered their engineering application. In this article, we first report the preparation of SCFRC modified by a low-viscosity liquid hyperbranched epoxy resin (Hyper E102). We then investigated the effect of Hyper E102 content on thermal and mechanical properties. The results show that the overall performance of the SCFRC first increases and then decreases with the increasing content of Hyper E102. With the incorporation of 12 phr Hyper E102, the tensile strength, fracture toughness, notched, and unnotched impact strength of SCFRC were increased by 16.7, 74.9, 95.3, and 194.5%, respectively. The toughening and reinforcing mechanisms were attributed to the following three aspects. First, the Hyper E102 improves the impregnation property of epoxy matrix against fibers, which helps form a better interfacial adhesion. Second, the incorporation of Hyper E102 reduces the internal stress level and stress concentration of the SCFRC. Finally, the critical crack length inside the SCFRC can be remarkably increased with the incorporation of Hyper E102, which can enhance the damage tolerance of a composite. (C) 2015 Society of Plastics Engineers