A distinctive graft copolymer is made by dissolving an oil-modified polyurethane resin in various vinyl monomers (methyl methacrylate, styrene, etc.). The monomer/oil-modified polyurethane solution is then miniemulsion polymerized to form a latex consisting of submicron particles of polymer with the oil-modified polyurethane grafted onto the polymer backbone. The latex can be applied to a substrate, which on drying forms a polymeric film with good film properties. The latex can be used in a latex paint formulation in place of an acrylate, acetate or styrene-divinyl benzene latex. In this way it is possible to produce water-borne oil-modified polyurethane coatings which combine the properties of an oil-based polyurethane coating with easy application and cleanup. The coating will beneficially lack organic solvent exposure of typical standard oil-modified polyurethane coatings.