An aqueous dispersion of nanoparticle/polyurethane composites is made by forming a mixture of nanoparticles and a continuous mass of a polyurethane prepolymer in the substantial absence of water and dispersing the mixture so made in aqueous medium. Alternatively, a polyurethane prepolymer or a mixture of nanoparticles and a continuous mass of a polyurethane prepolymer is dispersed into an aqueous dispersion of nanoparticles.