In the current study, soybean oil was epoxidized to form epoxidized soybean oil (ESO), which was then transesterified by a base catalyzed process to form epoxy methyl soyate (EMS), which was subsequently confirmed through FTIR and ¹H NMR. In the second step, the EMS bioresin was blended with a petroleum based epoxy (DGEBA) in different composition ratios as a reactive diluent and their various properties were compared with epoxidized soybean oil (ESO) and commercial diluent (alkyl(C₁₂–C₁₄) glycidyl ether (AGE)) based epoxy blends. The rheological behavior of the pure epoxy, bioresins (ESO and EMS), AGE and modified epoxy blends was studied by applying the Cross model to investigate the flow behavior at variable shear rates. The critical stress intensity factor and critical strain energy release rate of all types of blends were determined using a single edge notch test, and the results were compared. It is observed that EMS has a comparable viscosity with AGE at both low and high shear rates and it also toughened the virgin epoxy effectively. Differential scanning calorimetry (DSC) study shows an increase in the heat of curing reaction by the incorporation of a diluent, which confirms better contact with the curing agent, but the peak temperature shifts towards a higher value. The mechanical, thermal and thermo-mechanical properties of the EMS based system are found to be improved. The high intensity peak of the loss tangent curve indicates the superior damping properties of the EMS based formulation under vibrating conditions.