Leather retanning agents are of great meaning for the reactive competence and thermal, physical, and mechanical properties of treated leather fibers. For this motif, reactive amphoteric polyurethane with multialdehyde groups (AAPU) was prepared by a polyaddition reaction with isophorone diisocyanate, poly(tetrahydrofuran glycol), 2,4-dihydroxybenzaldehyde, 2,2-dihydroxymethyl propionic acid, and N-methyl diethanolamine as raw materials and was then used as a retanning agent to explore its effects on leather fibers. The structure of AAPU was confirmed by UV, Fourier transform infrared, and 1 H-NMR spectroscopy. An average particle size of 42.6 nm and an isoelectric point of 5.16 were determined. The thermal stability, physical and mechanical properties, and morphology of the AAPU-treated leather fibers and their reactivities to anionic materials were investigated. Because of the crosslinking effect of multisite covalent bonds, which resulted from reactions between the aldehyde groups in AAPU and the pendant amido groups from collagen fibers, and the role of the cationic groups in AAPU, the thermal stability of the treated leather fibers and their reactivity to anionic materials, such as dyestuffs and fatliquoring agents, were enhanced. Thus, the absorption rate of dyes was almost as high as 99.89%, and the physical and mechanical properties of the AAPU-treated final leather fibers were superior to those of the contrast.