A commercial-scale reactive extrusion processing system for recycled poly(ethylene terephthalate) (PET) flakes with an added chain extender, pyromellitic dianhydride (PMDA), was investigated. The PMDA concentration was varied with the intention of reaching a higher recycled PET intrinsic viscosity ([η]). The effect of changing the extruder residence time on the system's stability and the recycled PET [η] was also investigated. Reactive extruded PET with a PMDA concentration up to 0.3 wt% was found to have a higher [η] and lower carboxyl content than recycled PET processed in a normal extrusion system. A shift in [η] of about 0.18 dl/g was obtained with a 0.3 wt% PMDA concentration. A PMDA concentration above 0.3 wt% produced chemical, thermal and hydrodynamic instability in the system, causing crosslinking reactions and gel formation. The reactive extrusion system was stable at low residence time (45 s) and moderate (0.15 wt%) PMDA concentration; however, using 0.2 wt% PMDA produced higher reactive extruded recycled PET [η] with lower carboxyl content than other PMDA concentration levels examined. Residence times higher than 45 s produced higher reactive extruded recycled PET [η]. Reactive extruded recycled PET was also tested for mechanical properties. Polym. Eng. Sci. 44:1579–1587, 2004. © 2004 Society of Plastics Engineers.