This study successfully developed a bio-based, photocurable, anionic–nonionic dual-functional chain extender, and sulfonated cardanol-based polyethylene glycol (SCP), derived from renewable resources—cardanol and polyethylene glycol—for application in waterborne polyurethane dispersions (WPUDs). Utilizing SCP as a chain extender, WPUDs were prepared through a typical acetone process with poly(butylene adipate) (PBA), isophorone diisocyanate (IPDI), and ethylene diamine (EDA) at a constant NCO/OH ratio of 1:1. This research focused on the effects of polyethylene glycol molecular weight and SCP dosage on the particle size, stability, and film-forming properties of the WPUD. Optimal dispersion stability and film-forming performance were achieved with a polyethylene glycol molecular weight of 1500 and a PBA to SCP molar ratio of 4:1, yielding a particle size of 0.326 ± 0.010 μm and excellent storage stability over six months. The resulting WPU coatings exhibited a tensile strength of 11.4 MPa, which increased to 16.8 MPa after UV irradiation owing to the formation of a semi-interpenetrating network via the photopolymerization of cardanol’s unsaturated side chains. UV cross-linking also enhanced water resistance, reducing the water absorption rate (WAR) from 18.68% to 4.21% and the water vapor transmission rate (WVTR) from 6.59 × 10⁻⁵ g·m⁻¹·Pa⁻¹·d⁻¹ to 2.26 × 10⁻⁵ g·m⁻¹·Pa⁻¹·d⁻¹, while also improving thermal stability. These findings demonstrate that SCP offers a sustainable and effective solution for developing high-performance WPU coatings.