The influence of hard domains on the mechanical and thermomechanical properties of polyurethane and unsaturated polyester hybrid networks has been investigated. The hybrid networks consist of a polyurethane linkage formed by reacting unsaturated polyester polyol with polymeric 4,4＇-diphenylmethane diisocyanate (MDI) and for-radical crosslinking through styrene monomer and vinylene groups in the unsaturated polyester. Hard segments were formed by condensing two different types of chain extender, ethylene glycol (EG) and 1,6-hexanediol (HD), with MDI. Incorporation of chain extenders in the hybrid networks varied from 0% to 12%, by weight based on the weight of unsaturated polyester polyol. The thermomechanical properties of the polyurethane and unsaturated polyester hybrid networks were characterized by heat distortion analysis and by dynamic mechanical analysis. Flexural three-point bend tests and unnotched Izod impact analysis were used to investigate mechanical properties at ambient temperature. Hybrid networks with hard segments formed by MDI and EG showed an increase in the glass transition temperature. A second glass transition was found with incorporation of more than 6 wt%, EG due to the formation of phase separated hard domains. The rubber plateau of the hybrid networks decreased owing to the lower crosslinking density when chain extenders were incorporated. Phase-separated hard domains enhanced the rubber plateau by acting as physical crosslinks in the hybrid network until the glass transition was reached. The hybrid network had improved mechanical properties when more hard segments were added into it without creating the phase-separated hard domains. A dramatic drop in mechanical properties was observed for the sample with a two-phase structure.