Gamma‐ray induced seeded emulsion polymerization of methyl methacrylate and butyl acrylate was carried out in the presence of a polymerizable polysiloxane seed latex, obtained by ring‐opening copolymerization of octamethyl cyclotetrasiloxane (D4) and tetramethyl tetravinyl cyclotetrasiloxane (VD4), catalyzed by dodecylbenzene sulfonic acid (DBSA). A series of polysiloxane seed latices with different molecular weights, vinyl contents and particle sizes was used. The conversion–time curve showed that the polymerization rate was accelerated significantly by the seed latex. The obtained composite latices also showed good storage stability, mechanical stability and high electrolyte resistance ability. By using transmission electron microscopy (TEM), the morphology of the composite latex particles was found to display a quite uniform fine structure. The graft polymerization reactions between the polymerizable polysiloxane and the acrylates were confirmed by Fourier‐transform infrared spectroscopy (FT‐IR) and the graft efficiencies were also studied. The influence of seed content, molecular weight, vinyl content of the polysiloxane and seed latex particles size on the mechanical performance, water absorption ratio, surface properties and transparency of the latex films was also investigated. It was found that the seed content and particles size greatly affect the mechanical performance, water absorption ratio and transparency of the latex films. Copyright © 2005 Society of Chemical Industry