A functional derivative of epsilon-caprolactam, 5-azepane-2-one ethylene ketal or gamma-ethylene ketal epsilon-caprolactam, has been synthesized by a very straightforward and highly efficient Beckmann rearrangement reaction. Homopolymers of this new monomer and its copolymers with epsilon-caprolactam have been synthesized by anionic ring-opening polymerization using N-acetyl-epsilon-caprolactam and NaH. The ketone groups can be easily released by deacetalyzation, and subsequent reaction leads to complete reduction to hydroxyl pendant groups. The ketone-containing (co)polymers respond sensitively to both thermal and photo-cross-linking in this novel class of materials. These new aliphatic polyamides bearing either ketone or hydroxyl pendant groups provide entries into it large number of application areas.