This paper, second in a series, reports the cationic polymerization of 3-ethyl-3-(hydroxymethyl)oxetane leading to branched polyethers containing exclusively methylol groups attached to the quaternary carbon atoms (primary hydroxyl groups). GPC chromatograms and MALDI TOF spectra of the isolated polymers demonstrated that intramolecular chain transfer to polymer occurred, providing a cyclic fragment of the macromolecule. This limited the chain growth and thus the molecular weight of resulting polymers. The phosphorus cation-trapping method showed that both secondary and tertiary oxonium ions were present in the polymerization mixture, indicating that both active chain end (ACE) and activated monomer (AM) mechanisms contributed to the chain growth. As a consequence of the coexistence of two propagation mechanisms and significant chain transfer, both molar mass and degree of branching depended only slightly on the polymerization conditions.