Waterborne polyurethane (WPU) films have emerged as eco-friendly alternatives to solvent-based coatings due to their low volatile organic compound (VOC) emissions, adjustable mechanical properties, and wide industrial applicability. The chemistry of WPU plays a decisive role in dictating film performance, including adhesion, flexibility, chemical resistance, and durability. This review highlights the fundamental chemistry of waterborne PU dispersions, mechanisms of film formation, and the influence of molecular design on their structural and functional properties. The review highlights progress in environmentally friendly synthesis approaches, innovations in material crosslinking, and recent methods for modifying nanocomposites. It also examines how these developments support new uses across fields such as surface coatings, sustainable packaging, biomedical technologies, and energy-related systems.