Thermoplastic polyurethane elastomer (TPU) modified asphalt was prepared by a two-step process using MDI and PTMG. The improvement effects of different TPU content on high-and low-temperature rheological properties and thermal stability of asphalt were studied through experimental tests. The results showed that TPU could enhance the high-temperature properties of asphalt obviously. The improvement effect was more significant with the increase of TPU content. At the same time, glass transition temperature (Tg) of asphalt decreased with the increase of TPU content, indicating that TPU could improve the low-temperature performance of asphalt. These experimental results were further verified by the Molecular dynamics (MD) simulation results. Materials Studio 8.0 was used to establish the molecular models of asphalt, TPU and TPU modified asphalt. The effects of TPU content on mechanical modulus and Tg of asphalt were studied by MD simulation. The results revealed that TPU formed a close structure with asphalt to improve the structural stability of asphalt. And the free volume fraction of the modified asphalt decreased with the increase of TPU content. Thus, the high-temperature properties of asphalt were improved. The calculated Tg and moduli obtained from MD simulation accorded well with the experimental results from DSC and DSR, respectively. This study suggests a novel way to provide guidance for the development of TPU modified asphalt.