New water soluble and photocrosslinkable prepolymers containing acrylate and quaternary ammonium salt groups were synthesized from epoxy phenolic resin via ring-opening reaction with acrylic acid and with aqueous solution of triethylamine hydrochloride successively. The second reaction needs no phase transfer catalyst to accelerate, since the product formed can act as a phase transfer catalyst. The prepolymer obtained contains both photocrosslinkable acrylate groups and hydrophilic quaternary ammonium salt groups. Optimum conditions for these reactions were studied. The photosensitivity of the prepolymer was also investigated. The effects of different photoinitiators, different crosslinkable diluent monomers and amine accelerator on the photosensitivity of the prepolymer were compared. The photoinitiator of hydrogen abstraction type is still effective without using amine or alcohol as accelerator, because the prepolymer contains α H beside the OH groups formed in the ring-opening reactions.