This article reports a novel crosslinking functionality of the 2-hydroxyethyl methacrylate unit (HEMA) in the presence of an acid. The polymeric compositions, consisting of a polymer containing the HEMA unit and a photoacid generator, were insolubilized in an aqueous base developer on exposure to UV light and a successive baking process to provide a negative-working photoresist. A series of poly(benzyl methacrylate-co-methacrylic acid-co-2-hydroxyethyl methacrylate) terpolymers with various contents of HEMA were prepared to elucidate the photopolymeric characteristics. The polymer behavior in films was examined by a comparison of the photosensitivity and IR spectroscopic method. Experiments with a model compound were also carried out. On the basis of the results, we found that the resist was insolubilized by crosslinking through the transesterification of HEMA segments due to acid generated from the photoacid generator and subsequent heating. The advantage of using the 2-hydroxyethyl group is that in the terpolymer, the HEMA unit is transparent at a short-wavelength region and is a promising crosslinking unit for ArF lithographic photoresists.