Water-dilutable polyurethanes as coating resins curing by oxidative drying. N1-. Are made by (I) heating together (opt. in stages) (a) 25-70% unsatd. fatty acids of which 0-25% may be drying oils and which may contain up to 6% added maleic anhydride, the mixture having an iodine value of 130-390; (b) 0-30% (cyclo)aliphatic-, aromatic- or hydroxy carboxylic boxylic acids, or anhydrides of these; (c) 5-35% polyhydric org. hydroxy cpds., (d) 0-17% (esp. 13-17%) polyoxyalkylene cpds. contg. at least one (esp. at least 2) active H atoms, with an av. mol. wt. in the POA chain of 200-50.000 (esp. 2000-6000) and (e) 0-65% (esp. 0-15%) copolymerisable monomers, (II) converting the resulting OH grp. -contng. (and poss. COOH-gp. contg.) ester into an intermediate by reaction with (f) 0.05-50% isocyanates and (g) 0-60% (esp. 0-25%) unsatd mono- and/or polyalcohols in an amt. such that the total OH equiv.: NCO equiv. = 1.01 to 1.45 and opt (III) where the polyurethane contains COOH grps. converting it to water-dilutable form by adding alkali and/or strong org. bases. They are useful as binders in coating resin formulations, esp. in conjunction with water-dilutable phenolic, phenolic modified alkyd, or styrene-butadiene latex resins. The finishes can be applied by electrophoretic or mechanical means.