Shape memory polyurethanes (SMPUs) were synthesized by 4,4′-diphenylmethane diisocyanate (MDI), hexane-1,6-diol (HD), polypropylene glycol (PPG), and recycled polyvinyl butyral (PVB). Dynamic mechanical analysis, differential scanning calorimetry and Fourier transformation infrared attenuated total reflection spectroscopy was used to characterize the poly (vinylbutyral-urethanes). Micro-phase domain separation of hard and soft segments and phase inversion were investigated. Increasing the hard segment content, i.e., average hard segment molecular weight, leads to an increase in the degree of micro-phase separation, hard domain order and crystallinity. The crystalline hard segment structures combined with the elastic nature of soft segment matrix provide enough physical and chemical crosslinks to have shape memory effect.