To provide a process for preparing a water soluble resol resin having a reduced content of unreacted monomer and unreacted aldehyde which enables obtaining the reduction of an environmental load and properties excellent in curability and mechanical strengths and preferably provides a solvent-free water soluble resol resin.

First, an aldehyde and a phenol are reacted to obtain a water soluble resin. Then, ethylene urea is added in an amount of 0.1 to less than 0.5 per mol unreacted aldehyde, and unreacted aldehyde is reacted with ethylene urea to reduce the aldehyde. By doing so, a water soluble resol having a water dilution capacity (an amount of water added per 100 pts. resin for allowing the resin to become cloudy at 25C) of not less than 100 mass% is produced.