Lactide oligomer with molecular weight of 460 was synthesized and reacted with poly (oxytetramethylene) glycol (PTMG; Mn=650) to obtain oligolactide-terminated PTMG. Polyurethane was synthesized by the oligolactide-terminated PTMG, 4, 4′-diphenylmethane diisocyanate, and 1, 4-butanediol. The mechanical and thermal properties of the polyurethane was studied and compared with PTMG based polyurethane. The degradation behavior of the polyurethane put in the compost was evaluated by SEM, mechanical properties, and weight loss. The surface of the polyurethane degraded for 6 weeks had considerable number of voids. Modulus and weight significantly decreased with increasing time. On the other hand, control PTMG-based polyurethane showed no change after 6 weeks. These results indicate that the novel polyurethane having oligolactide moiety in the backbone-chain easily degrade under bio-active conditions.