In this work, a number of urethane‐modified polyesteramide (UmPEA) films were developed from mahua and castor oils, which are renewable resources. Mahua oil and diethanolamine were reacted to form mahua fattyamide, which was then reacted with itaconic acid to prepare polyesteramide. In order to make the UmPEA films, different proportions of polyesteramide and castor oil as polyols were reacted with isophoronediisocyanate. The UmPEA films showed excellent chemical resistance against water, acid, alkali, salt, and organic solvents and were found insoluble in common organic solvents. The thermal stability of the UmPEA films was investigated through TGA and DSC analyses, and their Tg values are between 69.1°C and 56.1°C for UmPEA films, which indicated that a higher content of CO enhances the Tg, and it was also found that the films were highly stable up to 230°C. The Ea values [224 kJ mol−1 (Tp1) and 226 kJ mol−1 (Tp2)] indicate that the castor oil enhances the thermal stability of the films due to better cross‐linking density occurring through the high hydroxyl groups of CO as the polyol which also showed better flame retardancy in the synthesized UmPEA films. Our findings demonstrate that the newly developed UmPEA films can be potent coating materials.