Waterborne polyurethanes (PUs) were hydrophobically modified using various types of acrylate monomers. PUs having hydroxy ethylacrylate (HEA) terminal groups were first obtained following a prepolymer mixing process. These PU base polymers were then chain extended with acrylate monomers via a radical polymerization mechanism. The effect of the overall composition, base polymer molecular weight, and type of acrylate were studied in terms of water swell and contact angle, as well as mechanical and dynamic mechanical properties of the emulsion cast film. It was found that water resistance, hardness, modulus, and tensile strength of the waterborne PU can be dramatically increased by acrylate incorporation. The reinforcing effect was more pronounced with multifunctional monomers, probably due to the crosslinking effect.