A new hybrid thermoplastic polyurethane (TPU) system that incorporates an organic, biodegradable poly(D,L-lactide) soft block with a hard block bearing the inorganic polyhedral oligosilsesquioxane (POSS) moiety is introduced and studied. Changes in the polyol composition made through variation of the hydrophilic initiator molecular weight show direct control of the final transition temperatures. Incorporating POSS into the hard segments allows for excellent elasticity above T-g, as evidenced with dynamic mechanical analysis, not seen in most other biodegradable materials. This elasticity is attributed to physical cross-links formed in the hard block through POSS crystallization, as revealed with wide-angle X-ray diffraction. Increasing the POSS incorporation level in the TPU hard block was observed to increase crystallinity and also the rigidity of the material. The highest incorporation, using a statistical average of three POSS units per hard block, demonstrated one-way shape memory with excellent shape fixing capabilities. In vitro degradation of this sample was also investigated during a two month period. Moderate water uptake and dramatic molecular weight decrease were immediately observed although large mass loss (similar to 20 wt %) was not observed until the two month time point.