Thermally stable, waterproof, hydrophilic, breathable poly(urethane‐imide) (PUI) films were prepared as a potential replacement for the existing polyurethanes (PU) with a lower degree of thermal stability for waterproof breathable clothing. Hydrophilic PUI films were prepared by reacting 4,4′‐ diphenylmethane diisocyanate (MDI), polyethylene glycol (PEG‐1500), and pyromellitic dianhydride (PMDA), with increasing hard segment (46%–61%) and compared with polyurethane films with similar PEG content. The breathability of PUI film is significantly higher than the PU film (~20%). Interestingly, despite the high degree of water sorption, the PUI films exhibited higher waterproofness (~85%) than the PU, which has been attributed to the presence of imide functionalities. The thermal stability of PUI was higher (Tmax1 ~ 420°C, Tmax2 ~ 600°C and char yield 21%) than the analogous PU (Tmax1 ~ 360°C, Tmax2 ~ 420°C, and char yield 6%). The waterproofness, water contact angle, and glass transition temperature are found to increase with increasing imide content, while the water sorption capacity and breathability decrease. The developed PUI coated fabric withstood hydrostatic pressure of ~3000 mbar, with a WVTR of 1200 g m−2 24 h−1, bestowing it excellent candidature as a waterproof breathable fabric.