Waste PET bottles were depolymerized by propylene glycol at a weight ratio of PET to propylene glycol of 37.5 : 62.5, using zinc acetate as a catalyst. The glycolyzed product, consisting of oligomeric diols with a number-average molecular weight range of 240-1107, was obtained. It was further reacted with palm oil and tolylene diisocyanate to obtain urethane oils at hydroxyl to isocyanate ratios from 1 : 1 to 1: 0.8, with and without methanol acting as a blocking agent. It was found that all the synthesized urethane oils were yellowish transparent liquids of low molecular weights. A lower isocyanate content or the presence of a blocking agent resulted in higher viscosity, higher molecular weight, and shorter drying time. The films of all synthesized urethane oils exhibited good hardness, excellent flexibility, and high impact strength. They also showed excellent water resistance, good acid resistance but only fair alkali resistance. Moreover, these prepared urethane oils had better adhesion compared with those of the commercial urethane oil. (c) 2007 Wiley Periodicals, Inc.