The aim of this study is to simultaneously improve the mechanical strength and fracture toughness properties of recycled poly(ethylene terephthalate) (r-PET). For this purpose, Joncryl (R) was used as chain extender and Lotader (R) was used as impact modifier. The combined effect of chain extender and impact modifier on the chemical, fractural, mechanical, and thermal properties of r-PET was investigated. Fourier transformed infrared spectroscopy (FTIR) analysis, EWF analysis, tensile test, and differential scanning calorimetry (DSC) analysis were performed. FTIR analysis revealed that all the epoxy groups in the Joncryl (R) were consumed during the compounding. EWF results showed that while toughness of r-PET decreased with the addition of Joncryl (R), toughness was increased with addition of impact modifier Lotader (R). It was found that 2.5% Lotader (R) usage at the same time with Joncryl (R) increased the tensile strength of r-PET as well as toughness. It was observed from DSC analysis that chain extender and impact modifier addition did not change the thermal transition temperatures of r-PET.