The effect of reducing the molar mass of the shell layer of core-shell latex particles on film-forming and final coating properties of self-crosslinking latexes was investigated. Latex particles were prepared by the semi-continuous non-seeded emulsion polymerization of methyl methacrylate, butyl acrylate and methacrylic acid as main monomers. The particle core was slightly cross-linked (using a constant amount of allyl methacrylate as a comonomer) to prevent the copolymers forming the core phase from migration into the shell phase. For interfacial cross-linking, diacetone acrylamide was copolymerized into the shell layer of latex particles to provide sites for subsequent reaction with adipic acid dihydrazide. The molar mass of copolymers forming the shell layer was systematically varied by isooctyl 3-mercaptopropionate chain transfer agent included in the synthesis of each of the shell layers and the molar mass distribution was determined using size exclusion chromatography coupled with a multi-angle light scattering detection. Fundamental properties of latexes and cast films were systematically compared. These properties included minimum film-forming temperature, pendulum hardness, adhesion, impact resistance, stress-strain properties as well as the characterization of water absorption. The results confirmed theoretical predictions and described empirically the effects of reducing the molar mass of the shell layer copolymer on final properties of coating films.