A novel terpolymer based on a polymerizable derivative of 2-hydroxyethyl methacrylate monomer was prepared and evaluated as a photostabilizer for rigid polyvinyl chloride (PVC). The terpolymer, namely, methyl methacrylate/2-hydroxyethyl methacrylate/N-hydroxyphenyl maleimide, MMA/HEMA/N-OHPh-MI, was characterized and its structure was confirmed by FTIR, and ultraviolet-visible (UV-vis) spectroscopy. Gel permeation chromatography was applied to determine the molecular weights of the terpolymer, while its structural morphology was investigated using scanning electron microscopy. The terpolymer was blended with PVC in (2, 4, and 6 wt%) to investigate its photostabilizing potency upon UV irradiation. The results revealed that the stabilizing effect of this terpolymer increased upon increasing the stabilizer concentration and the content of the maleimide (MI) units in the terpolymer. Homogeneity in the structure morphology was attained in case of using the terpolymer at high concentration and high MI content.