This study reports the synthesis and characterization of thermoplastic polyurethane cationomers and its dispersion in water. The cationomeric polyurethanes were synthesized by reacting polyol, isocyanate, NMDEA and dihydrazide followed by ionization of the tertiary nitrogen atoms of NMDEA moieties with alkyl bromides. Variations were done with respect to chain length of cationizing agent, isocyanate type and chain extender and all the compositions were compression molded into sheets. The ionization of the tertiary nitrogen atom in the PU backbone was confirmed by NMR and GPC results showed that the compositions with increasing alkyl chain length showed increasing molecular weight. The cationomers showed a Tg corresponding to the soft segments around −60°C and hard segment in the 5–15°C range. PU cationomers exhibited enhanced tensile strength and elongation but lower storage modulus compared to the unionized samples. Water contact angle measurements indicated that the contact angle increased with increase in the length of the pendant alkyl groups and the composition carrying sebacic dihydrazide as chain extender in the place of adipic dihydrazide exhibited the highest contact angle (112°). The polymers had antifouling properties since there was no growth of microorganisms over the films and solution of polymer in DMSO (2 mg/ml) exhibited antimicrobial properties against E. coli and S. aureus with a growth inhibition of 10 to 29% and 9 to28% respectively. Among all the cationomers, the one carrying C8 alkyl chain as pendant group with the right balance of hydrophilicity-hydrophobicity could be dispersed in water yielding cationomeric waterborne PU dispersion. This dispersion was very stable and suitable for coating hydrophobic surfaces like polypropylene.