We have prepared the nanocomposites of a polyether-type waterborne polyurethane (PU) incorporated with different amounts (17.4-174 ppm) of gold (Au) nanoparticles ( approximately 5 nm). The nanocomposite containing a certain amount (43.5 ppm) of gold was previously demonstrated to possess the optimal thermal and mechanical properties, as well as much reduced foreign body reactions in subcutaneous rats. In this study, the surface morphology, biocompatibility, oxidative degradation, and free radical scavenging ability of the nanocomposites were characterized in vitro. The nanocomposite at 43.5 ppm of gold ("PU-Au 43.5 ppm") exhibited different surface morphology confirmed by the atomic force microscope. PU-Au 43.5 ppm also showed enhanced cellular proliferation, reduced platelet and monocyte activation, and much less bacterial adhesion, relative to PU alone or nanocomposites at the other Au contents, in general. This better biocompatibility was associated with the surface morphological change in the presence of Au. The oxidative degradation in PU-Au 43.5 ppm was also inhibited. The increased oxidative stability corresponded to the greater free radical scavenging ability of the nanocomposites.