Unlike with paints and stains, if your polyurethane is oil-based, that doesn't automatically mean that it can be used outdoors. Oil-based paints and stains will naturally repel water, though sealing with a product such as polyurethane or varnish is still recommended. Whether polyurethane is oil-based or water-based, it still offers the same amount of protection. The difference occurs when the polyurethane dries. Oil-based polyurethane turns a light shade of amber when it dries, which gives wood a warm, oiled appearance. Avoid using oil-based polyurethane on surfaces that you've painted white.
Unlike oil-based polyurethane, which must be cleaned from brushes and surfaces with mineral spirits before it dries, water-based polyurethane can be cleaned up using soap and water. This is important when you're ready to clean the brushes or if you accidentally spill some. Once water-based polyurethane dries, however, it's just as strong as its oil-based counterpart. The difference is that water-based polyurethane dries much more quickly, and when it dries, it turns clear. Use water-based products on surfaces you don't want altered.
As with the water-based and oil-based products, water-based oil-modified polyurethane is available in both interior and exterior formulas. This type of polyurethane dries faster than oil-based products, though usually not as quickly as water-based products. As with oil-based polyurethane, water-based oil-modified products turn wood a warm shade of amber once it dries.
Between water-based, oil-based, and water-based oil-modified polyurethane products, key characteristics differentiate each one, though all three can be formulated for interior or exterior use. What makes exterior polyurethane different is the inclusion of additives that protect wood and other surfaces from UV rays that fade and deteriorate the finish. This means that exterior polyurethane can be used on exterior and interior surfaces, but interior polyurethane should never be used on an exterior surface or even on an interior surface that gets lots of sun exposure.