Novel biodegradable and biocompatible poly(ester-urethane)s were synthesized by in situ homogeneous solution polymerization of poly(epsilon-caprolactone) diol, dimethylolpropionic acid (DMPA), and methylene diphenyl diisocyanate in acetone followed by solvent exchange with water. The effects of the DMPA content and hard segment content on the properties of the polyurethanes were measured by DSC, TGA, and hydrolytic degradation measurements. The results showed that DMPA had a dramatic effect on the particle size; the particle size decreased rapidly with increasing DMPA content. The hydrolytic degradation test showed that the degradation rate was little affected by the DMPA content in the range investigated, but was observed to be influenced by the hard segment content. Cell toxicity analysis showed that the biodegradable poly(ester-urethane)s synthesized in this study did not exhibit any detectable toxicity to human umbilical vein endothelial cells and mouse embryonic stem cells. Both types of cells can effectively adhere to and spread on the surface of pure poly(epsilon-caprolactone) or poly(esterurethane)s. The present study demonstrates the feasibility of a facile synthesis of biodegradable polyurethanes and of their aqueous dispersions with prescribed properties for biomedical applications. (c) 2008 Elsevier Ltd. All rights reserved.