Thermoplastic poly(ester-urethanes) were polymerized in a two-step process : a condensation copolymerization of lactic acid (LA) and epsilon-caprolactone (CL), using stannous octoate as catalyst, followed by an increase in the molecular weight through urethane linking. The use of 1,4-butanediol results in oligomer molecules with hydroxyl functionality at both ends. The effect of comonomer ratio on the thermal and mechanical properties of the poly(ester-urethane) was investigated. SEC, FTIR, and C-13 NMR were used to confirm the formation and structure of the polymer; a random sequence distribution of the comonomer units was concluded along the polymeric chains. All poly(ester-urethanes) were amorphous, with T-g varying from 53 to -45 degrees C. Poly(ester-urethanes) with a small amount of CL units were rigid, having a tensile modulus of 1700-2100 MPa, maximum stress of 36-47 MPa, and maximum strain of 4-7%. CL-rich poly(ester-urethanes) were highly elastomeric with maximum stress of 9 MPa and with maximum strain over 1000%. Hydrolytic degradation was studied in phosphate buffer solution (pH 7.4)at 37 degrees C.