A process for preparing aqueous dispersions of polyurethanes comprises dispersing polyurethane prepolymer containing unreacted --NCO functionality in water with moderate agitation at a temperature at or below 65.degree. C., preferably at or below 38.degree. C., and more preferably within the range 38.degree.-25.degree. C.; simultaneously reducing the agitation to a mild rate and maintaining the temperature within the range 38.degree.-85.degree. C., preferably, 60.degree.-65.degree. C., until the reaction of --NCO with water levels off; adding an effective amount of a quenching agent to react with sufficient --NCO functionality to reduce the number of available --NCO groups that can react with water so that the evolution of CO.sub.2 is reduced or eliminated during storage of the polyurethane dispersion; and at any of the previous sequential steps adding an effective amount of a deaerating agent to reduce or eliminate CO.sub.2 foaming or to liberate any dissolved CO.sub.2 gas.