A photochromic waterborne polyurethane-based dye with azobenzene groups WPU-DDB-3BF was prepared by incorporating Disperse Diazo Black 3BF (DDB-3BF, CAS: 6232-57-1) into the polyurethane chain according to a modified acetone process. The expected structure of WPU-DDB-3BF was characterized by FT-IR, Raman and UV-Vis spectra. Containing the well-known dye of azobenzene groups, WPU-DDB-3BF exhibits a slow photochromic process. Compared with DDB-3BF, the isomerization time of WPU-DDB-3BF has obviously grown longer. The improved thermal stability of WPU-DDB-3BF is ascribed to the attachment of azobenzene units to polyurethane backbone chains. The polyester fibers dyed with WPU-DDB-3BF show high color yield (K/S), outstanding breaking strength retention, excellent breathability and strong wrinkle resistance. From the experimental results, WPU-DDB-3BF possesses outstanding photochromism and dyeing performance.