Water-based polyurethane (WPU) is an alternate green pathway which poses a minimum threat to the environment. In WPU, hard segments (HS) and soft segments (SS) have a pronounced effect on the physicochemical properties of the polymer. Therefore, the effect of a change in the size of HS and SS on the properties of WPU were studied in detailed. Size of HS and SS were varied by increasing the aliphatic chain length of chain extender and PEG respectively. WPU were prepared with different compositions and the effect on thermal stability, mechanical properties, chemical resistance, biodegradation, biocompatibility, the degree of swelling, and drug release rate was studied. For this purpose, two series of WPU were synthesized to study structure-property relationship. The first series of WPU were synthesized by varying molecular weights of polyethylene diol (PEG, M-n = 650, 1250, 1500, and 2000 g/mol) and the second series was synthesized by using diamine chain extenders (CE) with increasing aliphatic chain. All WPU did not show any cytotoxicity as evaluated by MIT assay and are designated as safe biomaterials.