The study investigates the scope for significant enhancements in shape-memory properties in blends of thermoplastic polyurethanes (PUs) and polybenzoxazine (PB). PB was expected to serve as a second fixed phase in addition to hard segment of PU. The shape-memory compounds were prepared in three steps. First, benzoxazine monomer was dissolved in urethane prepolymer synthesized from 4,4′-methylenebis (phenyl isocyanate) (MDI) and poly (tetramethylene) glycol (PTMG). Second, the prepolymer was chain extended with 1,4-butanediol (BD) without curing of benzoxazine. Third, the benzoxazine was polymerized into PB by thermal curing at 180 °C for 3 h. A compound with 17 wt% PB exhibited a recovery stress (RS) of 13 MPa and strain recovery (SR) of 93% compared with RS of 6.8 MPa and SR of 72% for PU.