Enhancing the toughness of epoxy resin (EP) and optimizing the recovery of polyethylene terephthalate (PET) constitute significant challenges in current product manufacturing and environmental protection domains. In this work, toughening of epoxy resin was studied using recycled polyethylene terephthalate (rPET) as toughening agent and multi-carboxyl polyethylene glycol (PEGc) synthesized from polyethylene glycol and trimellitic anhydride as a modifier. Mechanical property tests indicated that the addition of 6 phr of rPET increased the impact strength of the epoxy resin from 6.77 ± 2.26 kJ/m2 to 19.10 ± 3.53 kJ/m2. Moreover, the further addition of PEGc could produce a significant toughening effect with rPET. Specifically, the impact strength, tensile strength, and elastic modulus of the epoxy resin containing 6 phr of rPET and 15 phr of PEGc increased by 318.8 %, 13.9 %, and 23.9 %, respectively, compared with those of pure EP. The significant toughening effect is attributed to the skeleton provided by rPET and flexible molecular chains provided by PEGc. Meanwhile, the results of molecular dynamics simulation confirmed that PEGc can effectively enhance the modulus of rPET/EP composites. Through the curing kinetic parameters obtained from non-isothermal DSC tests, the Kamal autocatalytic model was found to better describe the curing reaction process of the epoxy composites. This work provides a low-cost route for fabricating epoxy composites with excellent toughness.