The primary goal of this study is to improve the water resistance of a soybean meal-based bioadhesive and its resultant plywood with water-soluble 5,5-dimethyl hydantoin polyepoxide (DMHP). DMHP is well-distributed in the adhesive system and the water resistance of the adhesive/resultant plywood increases with increased DMHP addition from 5 to 13 wt%. This improvement is attributed to the following: (1) DMHP reacts with active groups on protein molecules to form a dense cross-linking network, improving the cross-linking degree of the cured adhesive; (2) adding DMHP decreases the adhesive viscosity, which helps the adhesive to penetrate into the wood surface and interlock; (3) the wettability of the adhesive increases after incorporating DMHP; (4) the adhesive with DMHP creates a smooth surface with fewer holes and cracks to prevent moisture intrusion. Incorporating 13 wt% DMHP effectively improves the moisture resistance of the resultant adhesive by 38.7% and the wet shear strength of the resultant plywood by 182.9%, up to 1.16 MPa, well within interior-use plywood requirements. Adding DMHP also increases the adhesive solid content by 26.6% and decreases adhesive viscosity to 13 610 mPa s, which is beneficial for industrial-use plywood adhesives. Further increasing the DMHP addition to 17 wt%, the wet shear strength of the plywood with the resultant adhesive decreases by 40.5%, however, this is attributed to the significant penetration of the adhesive into the wood surface caused by the low viscosity.