Abstract: Tertiary nitrogen-containing chain-extended epoxy resins, capable of forming stable aqueous emulsions, may be produced by chain-extending an epoxy resin using a tertiary nitrogen containing ether or ester polyol for example, particularly, polycaprolactone which has been polymerization initiated by a tertiary amine polyol such as N-methyl diethanolamine. The corresponding amine salt is formed by treatment with an acid for example acetic acid and the resulting cationic polymer may be dispersed in water to form a cationic emulsion capable of being coated onto a substrate by electrodeposition. The chain extended resins, by virtue by their content of free epoxy groups are also usable for cross-linking and other uses.