The radical terpolymerization of tetrafluoroethylene (TFE) with propylene (P) and 4,5,5-trifluoro-4-penten-1-ol (FA3) for the synthesis of fluorinated polymers bearing hydroxy side groups is presented. The polymerization was carried out in emulsion and in a batch operation, initiated by a redox system containing tert-butyl-peroxybenzoate. The reaction proceeded without any induction period and in a stationary state at low conversion (up to 12%). The presence of the trifluorovinyl hydroxy monomer in the ternary system sharply decreased the polymerization rate, in contrast to that of the TFE/P binary one. The order of the reaction about FA3 was 1.25. The terpolymer compositions were determined by elemental analysis by H-1- and F-19-NMR spectroscopy. An almost equimolar ratio of TFE and P base units in the terpolymer was found, while the FA3 was inserted between TFE/P blocks. The presence of P increased the polymerization rate and lowered the chain transfer coming from FA3 when compared to the TFE/FA3 binary system. Thermal properties were assessed. The glass transition temperatures (T-g) slightly decreased with the FA3 content. The decomposition temperatures were also affected, showing two steps of decomposition related to the amount of FA3 in the copolymer, and is discussed.