Epoxy grafted acrylate composite latex is prepared by using two-step synthesis method. The process not only solves the problem of organic solvents pollution, but also increases the graft ratio and improves simultaneously the storage stability. The optimum conditions of the reactive process are determined. The chemical structures of esterification product and epoxy acrylic graft copolymer are proved by FT-IR and 1H NMR. The salt spray test indicates that the coating presents a perfect corrosion resistance. The dynamic mechanical analysis (DMA) shows that the films of composite latex have high loss coefficient value and broad temperature range. It is implied that the composite material possesses good damping property.