Nano-particle-size phosphated polyurethane dispersions were synthesised from phosphorus-containing macroglycol, bis (hydroxymethyl) propionic acid and methylene-bis-(4-isocyanatocyclohexane) (H12MDI). After the carboxylic acid groups of the phosphated polyurethane were neutralised by suitable bases, water was added to form the phosphated polyurethane dispersion. Chain flexibility affected particle-size reduction because flexible particles are more deformable in a shear field. During phase inversion the dispersed phase can more easily be broken into smaller particles. Depending on the number of hydrophilic groups present, the dispersion can be obtained in a very finely divided form, so that it practically has the appearance of a solution. Crosslinking of the dispersions with melamine showed that hexamethoxymethyl melamine does not self-condense during the curing and co-condensation was predominant. It was further shown that the cure response of the polyurethane dispersions was affected by the nature of the neutralising amine. Triethanolamine neutralised dispersions gave very poor cure response compared with triethylamine due to the low-volatility and the tendency to enter side reaction with the melamine. (C) 2003 Published by Elsevier Science Ltd.