In this work, the effect of synthesizing shape memory polyurethanes in aqueous dispersions instead of in organic solvents on the structure and properties of the obtained polymers was investigated. Shape memory polyurethanes based on polycaprolactone diol and isophorone diisocyanate were synthesized by two routes: (1) aqueous dispersion (PU/SMWATER) and (2) dissolution in THF (PU/SMTHF). The samples were analyzed by infrared spectroscopy (FTIR), X-ray diffraction (XRD), static light scattering (SLS), atomic force microscopy (AFM), differential scanning calorimetry (DSC), dynamic mechanical analysis (DMA), and mechanical tests. The aqueous dispersion method led to the production of polyurethanes with a higher degree of phase separation and a higher degree of crystallinity. The morphology of the obtained polyurethanes demonstrated that PU/SMWATER displays a structure with better defined phase separated domains. The polyurethanes exhibited similar average molar masses, soft segment glass transitions (T-gs) and mechanical properties. The lower degrees of phase separation and crystallinity of the PU/SMTHF led to lower values for the shape memory properties (shape recovery ratio (R-r)). The observed changes in the structure of the polyurethanes due to the replacement of organic solvent by an aqueous dispersion during their syntheses confirmed the preparation of shape memory polyurethanes with enhanced shape memory properties. POLYM. ENG. SCI., 57:432-440, 2017. (c) 2016 Society of Plastics Engineers