In order to explore the effect of modified rubber powder on performances of cement mortar and its mechanism, four factors i.e. mixing order, particle size, modified rubber powder content and modification method, and their three levels of orthogonal experiment were used. The performances of cement mortar in different conditions were test. The optimal combination of conditions was determined through range analysis. Thermogravimetric analysis, scanning electron microscope and mercury injection tests were used to measure the CH content, interfacial transition zone morphology and pore structure. The test results showed that adding modified rubber powder could reduce CH content, interface transition zone thickness and gel pore volume of cement mortar and improve its drying shrinkage and toughness. However, the adding modified rubber powder could slow down the hydration process and increase the macropore volume of cement mortar, which reduce its strength slightly. So, it was found that the performances of cement mortar with the 1% chemical modification of 301μm powder using after mixed order were the best.