With the enhancement of people′s consciousness of environmental protection and requirement of the properties of basic resins,the aqueous dispersions based on epoxy resin modified by polyurethane and polyurethane modified by epoxy resin were developed rapidly and used widely.It was reviewed in this paper on the development and progress of aqueous dispersionsbased on epoxy resin modified by polyurethane and polyurethane modified by epoxy resin in recent years,and its preparation approaches and application fields.The performance of epoxy and polyurethane can be improved distinctly by modifying with each other.