The paper aims at effective chemical recycling of poly(ethylene terephthalate) (PET) fiber waste into useful products, such as hydrophobic disperse dyes for synthetic textiles. For this, PET fiber waste was glycolytically depolymerized using excess of ethylene glycol in the presence of sodium sulfate as catalyst. The product, pure bis(2-hydroxyethylene terephthalate) (BHET) was obtained with > 60% yield by successive recrystallization. In order to synthesize hydrophobic disperse dyes, applicable to synthetic textile fibers, BHET was converted to bis(2-chloroethylene terephthalate), reacted with the p-nitro benzoic acid, reduced and then reacted with bromine and potassium thiocyanate to get benzothiazole derivative. Coupling with N,N-diethylaniline produced a bright yellow disperse dye (Dye A). Similarly, coupling of p-amino benzoic ester with N,N-diethylaniline led to an orange colored disperse dye (Dye B). These dyes were applied onto polyester fabric by conventional method. Results in terms of depth of dyeing, evenness and the performance characteristics were found to be promising. (c) 2009 Elsevier Ltd. All rights reserved.