The utilization of coconut diethanolamide (p-CDEA) as a substitute polyol for petroleum-based polyol in fully biobased rigid polyurethane-urea foam (RPUAF) faces challenges due to its short chain and limited cross-linking capability. This leads to compromised cell wall resistance during foam expansion, resulting in significant ruptured cells and adverse effects on mechanical and thermal properties. To address this, a novel sequential amidation-prepolymerization route was employed on coconut oil, yielding a hydroxyl-terminated poly(urethane-urea) prepolymer polyol (COPUAP). Compared to p-CDEA, COPUAP exhibited a decreased hydroxyl value (496.3−473.2 mg KOH/g), an increase in amine value (13.464−24.561 mg KOH/g), and an increase in viscosity (472.4−755.8 mPa•s), indicating enhanced functionality of 34.3 mgKOH/g and chain lengthening. Further, COPUAP was utilized as the sole B-side polyol in the production of RPUAF (PU-COPUAP). The improved functionality of COPUAP and its improved cross-linking capability during foaming have significantly improved cell morphology, resulting in a remarkable 4.7-fold increase in compressive strength (132−628 kPa), a 3.5-fold increase in flexural strength (232−828 kPa), and improved insulation properties with a notable decrease in thermal conductivity (48.02−34.52 mW/m•K) compared to PU-CDEA in the literature. Additionally, PU-COPUAP exhibited a 16.5% increase in the water contact angle (114.93°to 133.87°), attributing to the formation of hydrophobic biuret segments and a tightly packed, highly cross-linked structure inhibiting water penetration. This innovative approach sets a new benchmark for fully biobased rigid foam production, delivering high load-bearing capacity, exceptional insulation, and significantly improved hydrophobicity.