Cashew nut shell liquid (CNSL) as a by product of cashew nut industry was not utilized. CNSL can be used to produce a rubber-like materials. The objectives of the research was to study the application of CNSL resin as substitute material for styrene butadiene rubber (SBR) in the carcass compound. CNSL was reacted with formaldehyde resulting a rubbery CNSL-formaldehyde resin. CNSL –formaldehyde resin was prepared by reaction of 100 parts of CNSL, 5 parts of a 37% aqeaus solution of formaldehyde and 2 parts of ammonium hydroxide for 60 minutes at 1500C. Ratio of SBR/CNSL formaldehyde in tyre carcass compunds were 50/0, 40/10, 30/20, 20/30, 10/40 and 50/0, respectively. The results show that substitution CNSL – formaldehyde resin for SBR was up to 10 phr. Increasing amount of CNSL-formaldehyde resins have increase physical properties such as hardness, peel test, and density, but decreased tensile strength,elongation at break, and abrasion resistance. A compound with ratio SBR/CNSL-formaldehyde resin 40/10 performed the best physical properties i.e:139.454 kg/cm2 tensile strength, 710.97% elongation at break, 62 Shore A hardness, 1.124 g/cm3density, 423.477 N/inchi peel test, and 3.214 mm3/kgm abrasion resistance, respectively.