A sulfur-quinone diol monomer, 2,5-bis-(2-hydroxyethylthio)-1,4-benzoquinone (SQM-2), was prepared by the reaction of 2-mercaptoethanol with benzoquinone. SQM-2 and polycaprolactone diol (number-average molecular weight = 1250) were condensed with toluene diisocyanate to give sulfur-quinone polyurethanes. Two compositions were prepared, SQPU-1 containing 7 mol % SQM-2 and SQPU-2 containing 35 mol % SQM-2. These thermoplastic polyurethanes were soluble in solvents used in magnetic tape coating processes. The polymers were used to prepare magnetic coatings containing state-of-the-art commercial iron particles. The sulfur-quinone polyurethanes protected the iron particles against corrosion from a pH 2.0 aqueous buffer.