Polyphosphazene polyacids show potential as immunostimulating compounds and materials for microencapsulation. Their synthesis requires multistep chemical transition from a hydrolytically unstable macromolecular precursor, poly(dichlorophosphazene), to a water-soluble polyelectrolyte. Insufficient synthetic control in these reactions can lead to molecular weight variations and formation of macromolecules with "structural defects" resulting in significant variations in polymer performance. Simple and reproducible "one pot-one solvent" method is reported for the preparation of polyphosphazene polyacids-poly[di(carboxylatophenoxy)phosphazene] and its copolymers. Molecular weight characteristics and polymer compositions were studied as a function of reaction parameters. Macromolecular byproducts, incompletely substituted polymers containing hydroxyl groups and partially deprotected polymers containing propyl ester functionalities, were synthesized and characterized. It was demonstrated, that the presence of such groups can affect polymer characteristics, such as hydrolytic degradation profiles, immunostimulating activity, and microsphere forming properties. In vivo studies showed that the immunostimulating activity of polyphosphazene polyacids correlates with the content of acid functionalities in the polymer.