A unique urethane linkage that permits chemical grafting of poly(ethylene oxide) (PEO) linear chains to the surfaces of polystyrene (PS) latex particles has been developed. Chemically grafting the functionalized hydrophilic PEO macromers to the PS particle surface allows the latex to be polymerically stabilized in a water-based medium. Advantages of the urethane linkage include the high yield of the macromer synthesis and the hydrolytic stability of the final latex. Rheological experiments are used to examine both processing behavior and interparticle interactions for latex systems with different amounts of grafted PEG. Dynamic rheological experiments reveal that, at high macromer concentrations, the grafted PEO layer is effective in shielding the attractive interactions of the core PS particles that lead to flocculation. However, at low macromer concentrations, strong interactions are seen even at low particle weight fractions, indicating the presence of a flocculated system. Steady shear rheological evaluations show that the latex systems possessed suitable flow behavior for coating applications, even at relatively high particle weight fractions. Experimental steady shear data is utilized in conjunction with the Krieger-Dougherty equation to determine the size of the PEO stabilizing layer. The stabilizing layer thickness decreases as particle concentration increases, indicating a compressible system. Finally, the relationship between the strength of interparticle interactions and PEO graft density is gauged from the dependence of the power-law exponent of the elastic modulus on particle concentration.