Abstract: A two stage process for preparing an aqueous dispersion of a urea-formaldehyde condensation product comprising: in a first stage, reacting together formaldehyde and urea in a molar ratio of formaldehyde to urea in the ratio from about 2.5 to 1 to about 4.7 to 1 in the presence of a condensation catalyst until the methanol tolerance is in a range such that the condensate is clear and will remain clear, substantially free from precipitated reaction material, upon storage for one year at room temperature, to form an intermediate reaction product, then in a second stage, reacting said intermediate reaction product with an additional amount of urea such that the overall molar ratio of urea to formaldehyde is in the range from 0.8 to 1 to about 1.7 to 1, at an acid pH and at an elevated temperature not above about 70.degree.C., until the amount of water insoluble nitrogen present in the reaction mixture is in the range from about 15% to about 35% based on the total amount of nitrogen in the system.