In this article, rigid/soft thermoplastic polyurethane (TPU) films were produced via layer-multiplying co-extrusion and the effect of confinement on morphology and gas barrier and mechanical properties is studied. The soft TPU, which is 52% hardsegment, shows phase separation, while the rigid, 100% hard-segment TPU exhibits amorphous structures. Even though the viscosity ratio of the two TPUs is over 10 and the elasticity ratio around 100, optical and atomic force microscopies show that a multilayer structure was successfully achieved. Then, the multilayer TPU films were uni-axially stretched to different amounts of deformations, from 0% to 300%. DSC and WAXS results show that microconfinement occurs during orientation, which causes a significant reduction in oxygen permeability of multilayer TPU films, when stretched at 75%, by comparison to the mono and bi-layer TPU. The dependence of gas barrier properties on temperature and deformation was also investigated, and a 100% improvement in elongation at break was found when compared to films of the rigid TPU.