A novel oxazoline-functional methacrylate was prepared and employed as comonomer to produce nonaqueous dispersions of oxazoline-functional polymer particles. In nonaqueous free radical dispersion copolymerization of methylmethacrylate in the presence of oxazoline-functional methacrylate, ethyleneglycoldimethacrylate crosslinking agent, AIBN initiator, and polystyrene-block-poly (ethene-alt-propene) dispersing agent, the average polymer particle size, varying between 100 and 500 nm, was controlled by the dispersing agent contents. According to titration with HClO4 all oxazoline groups regardless of their location at particle surface or bulk, were accessible. Glass transition temperature decreased from 120 to 0 degrees C when oxazoline functional methacrylate was increased from 0 to 95 mol %. As imaged by atomic force microscopy incorporation of the new oxazoline-functional methacrylate improved film formation. Oxazoline-functional polymer particles were easy to redisperse in a variety of other diluents.