Using a micro-extruder a new class of polyurethanes, polyacylurethanes (PAUs), based on poly (epsilon-caprol actone) (PCL) oligomers and terephthaloyl diisocyanate was synthesized. These polymers are anticipated to have potential for biodegradable and/or biomedical applications. Therefore, PAUs were synthesized without the use of any, possibly toxic, catalysts. PCL diols of different molecular mass were used, namely 750, 1000, 1250, 1500, 2000, 3000 and 4000 g/mol. These diols were synthesized by thermal polymerization at 150 degrees C without the use of any catalyst. The PAUs of terephthaloyl diisocyanate were synthesized by reactive extrusion using a micro-extruder of 5 cm 3 at 130 degrees C. The PAUs obtained were characterized using DSC, GPC, DMTA, SAXS and tensile testing. Surprisingly, PAUs based on PCL chains of 750, 1000, 1250 and 1500 g/mol were found to show microphase separation/micro crystallization as proven by SAXS data combined with DSC. This microphase separation creates elastomeric properties as is known from polyurethanes. In the PAUs based on PCL chains of 2000, 3000 and 4000 g/mol part of the PCL was found to crystallize and no evidence of any phase separation of the acylurethane block was found. (c) 2005 Elsevier Ltd. All rights reserved.