The enhancement of transverse fracture toughness of unidirectional Kevlar and carbon fibre reinforced epoxy resin composites (KFRP and CFRP) has been studied using polymer coatings on the fibres. The results obtained show a substantial improvement in the impact fracture toughness of both KFRP and CFRP with polyvinyl alcohol (PVAL) coating without any loss of flexural strength; but there is only a moderate increase in impact toughness with other types of coating (i.e. carboxyl-terminated butadiene acrylonitrile (CTBN) copolymer and polyvinyl acetate (PVA)) with some reduction in flexural strength. The dependence of impact fracture toughness of these composites (with and without PVAL coating) on temperature was analysed on the basis of existing theories of toughening mechanisms from measurements of fibre-matrix interfacial properties, debond and fibre pull-out lengths and microscopic observations. The beneficial effect of fibre coating with PVAL on transverse fracture toughness is shown to sacrifice little damage tolerance of the composites against delamination fracture. © 1991 Chapman & Hall.