Waterborne castor oil-based polyurethane-silica nanocomposites with the polymer matrix and silica nanoparticles chemically bonded have been successfully prepared through a sol-gel process. The formation of silica nanoparticles in water not only reinforces the resulting coatings, but also increases the crosslink density of the nanocomposites. The (29)Si solid state NMR spectrum indicates the formation of silica and the TEM indicates that the nanoparticles are embedded in the polymers, resembling a core-shell structure. The silica nanoparticles in the polymer matrix play an important role in improving both the mechanical properties and the thermal stabilities of the resulting nanocomposites. This work provides an effective and promising way to prepare biorenewable, high performance nanocomposite coatings.