Polyurethane dispersion and urethane/acrylate composite latex were synthesized and characterized by using a particle size analyzer, gel permeation chromatograph (GPC), Fourier transform infrared spectroscopy coupled with attenuated total reflectance (FTIR-ATR), dynamic mechanical analysis (DMA), and instron test machine. The amount of solvent and dimethylolpropionic acid (DMPA) used during synthesis of poly-urethane resin straightway affected the average particle size and stability of aqueous polyurethane dispersion. The particle size of polyurethane dispersion had nothing to do with that of composite latex. FTIR-ATR analyses displayed both air-facing and substrate-facing surfaces, containing more polyurethane component than the average composition. Some crosslinking reactions occurred in preparing urethane/acrylic composite latex, as indicated by FTIR analyses and solvent extraction. DMA demonstrated three glass transitions for the film from composite latex. Instron tests exhibited better film performance properties for the composite latex than for the corresponding blend latex. A possible particle growth mechanism for preparing urethane/acrylate composite latex was proposed.