Abstract: Novel thixotropic alkyd resins are obtained by reacting at a temperature of between about 120.degree. C. to about 150.degree. C. for at least one hour (a) at least one alkyd resin and (b) a polyamide comprising the reaction product of: (i) a polycarboxylic acid; (ii) an active hydrogen compound having the formula X.sub.m --R--Y.sub.n, wherein R represents a group containing from 2 to 12 carbon atoms, X and Y are independently selected from primary amino, secondary amino and hydroxy, and m and n are each at least 1 and the sum of (m+n) is at least 2; and (iii) a capping agent comprised of an unsaturated and/or hydroxy functional monocarboxylic acid having from 8 to 22 carbon atom. The thixotropic alkyd resins of the present invention are particularly useful in preparing thixotropic paint and coating compositions having superior leveling and sag resistance.