Uretedione aziridinyl derivative (UAD) was prepared through the dimerization of isophorone diisocyanate and the addition reaction of aziridine to its isocyanate (NCO) end groups. An NCO-terminated polyurethane (PU) prepolymer was prepared from the addition of isophorone diisocyanate, poly(propylene glycol)s, and dimethylolpropanic acid. A mixture of UAD with the PU prepolymer and its NCO terminal groups were hydrolyzed to form primary amino groups during a water dispersion process. Meanwhile, the uretedione group of UAD reacted with these primary amino groups in the aqueous phase. Then, these aziridine end groups of UAD became part of an aqueous-based PU and served as latent internal curing agents. The self-curable, aqueous-based PU system obtained with this new UAD process is a convenient alternative for improving the performance of aqueous-based PUs. (C) 2004 Wiley Periodicals, Inc.