Abstract: A water-reducible polyester resin for use in producing urethane coatings comprises the reaction product of: a) hexahydrophthalic anhydride, trimellitic anhydride or phthalic anhydride; b) 1,4-cyclohexane dimethanol or trimethylol propane or mixtures thereof; and c) a polyethylene glycol selected from the group consisting of polyethylene glycols, methoxy polyethylene glycols and trifunctional polyethylene glycols having a molecular weight no greater than approximately 1050; the reaction product having a functionality between approximately 2 and 2.6. Another water-reducible polyester resin comprises the same components and a specified nonionic surfactant. Urethane coatings containing such polyester resins and a diisocyanate are also disclosed.