A nonionic epoxy-based polyol (NTP) which can be used in place of the commonly used polyol dispersions to prepare two-component waterborne polyurethanes was synthesized with terpinene-maleic ester-type epoxy resin (TME), polyethylene glycol (PEG), and trimethylopropane (TMP) in the presence of sulfuric acid as catalyst. The synthesis process was tracked with gel permeation chromatography (GPC) and differential scanning calorimetry (DSC) by investigating the changes of molecular weight and glass transition temperature (T-g) of the product. FTIR was used to characterize the chemical structure of NTP. Major technical parameters of NTP were as follows: hydroxyl value 100 mg/g, hydroxyl group content 3.04%, T-g 4.03 degrees C, and viscosity 150 mPa s (40% solid content). Effect of molecular weights and dosages of PEG on stability of NTP dispersion was examined by particle size analyses. It was found that stable dispersion was obtained when using PEG6000 as hydrophilic chain and its dosage >= 8% by the weight of TME. The average particle size of the prepared dispersion was about 200 nm from particles size and TEM analyses. The NTP dispersion showed characteristic of shear thinning, which indicated it was a pseudoplastic fluid. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 120: 579-585, 2011