Abstract: A latex suitable for forming improved water-resistant polyurethane products. The latex is prepared in an aqueous system by reacting an NCO-terminated, quaternized, preferably linear, polyurethane prepolymer with water and chain-extending the resulting polyurethane-urea with a difunctional or polyfunctional reagent containing groups reactive with primary amino groups, such as epoxy groups, anhydrides and aldehydes, thus increasing the molecular weight of said polyurethane-urea. The latex thus formed can be dried into highly water-resistant films, coatings, and the like.