Novel biodegradable and biocompatible block copolymers of poly(epsilon-caprolactone) (PCL) and polyphosphoester were prepared in tetrahydrofuran by a two-step sequential ring-opening polymerization of epsilon-caprolactone and 2-methoxyethyl ethylene phosphate (MOEEP) using aluminum isopropoxide as an initiator. Kinetics studies revealed that homopolymerization of MOEEP initiated by aluminum isopropoxide was in the first-order kinetics with living polymerization characteristics. Polymerization of MOEEP with living PCL macroinitiator obtained by aluminum isopropoxide initiation was efficient in forming block copolymer with narrow molecular weight distribution, which was demonstrated by gel permeation chromatography and C-13 NMR analyses. The molecular weight and linear molecular architecture of block copolymer can be controlled by adjusting the molar ratios of monomers and the initiator as well as reaction time. Transesterification side reaction from pendent groups of poly(2-methoxyethyl ethylene phosphate) block, leading to branched molecules, was only observed when the reaction was carried out for relatively long time at high MOEEP conversion. These materials have potential for applications in biomaterials surface modification, drug delivery, and tissue engineering.