The aqueous polyurethane hybrid dispersion modified by the epoxy resin were synthesized using 1,4-butanediol ( BDO ) and dimethylolpropionic(DMPA) as chain extenders. A kind of automobile interior decoration adhesive was made by the modified hybrid dispersions. Effects of the content and the kinds of epoxide resin on the properties of dispersions and dispersion-cast films such as appearance, pot life, viscosity, particle size, molecular mass, hardness, swelling in water, contact angle, strength of stress, elongation at break, and other mechanical properties were studied. At the same time the effect of the E20 content on the peel strength of the adhesive for several automobile interior decoration substrates such as rubber/wood, poly(vinyl chloride)/wood; leather/wood, sponge/wood was investigated. The experimental results show that when the epoxy resin E20 content was 8%, the modified polyurethane hybrid dispersions possess better properties and the adhesive made by the modified dispersions posses better adhesion for automobile interior decoration substrates. The stress-strain curve of the modified aqueous polyurethane hybrid dispersions films shows the modified aqueous cast films possess better rigidity and toughness.