A method for the preparation of sulfonated polymer compositions wherein water dispersible isocyanate-terminated polyurethane prepolymers are reacted in the presence of aqueous polyvinyl dispersions which may contain active hydrogen atoms. The invention is further directed to a water-based sulfonated polyurethane polyvinyl hybrid latex wherein a sulfonated polyurethane is used as a seed for the polymerization of ethylenically unsaturated monomers and a method for preparing the same. The inventive compositions develop interpenetrating polymer networks or may form core-shell type structures, and are characterized as having enhanced mechanical and adhesion properties.