Characterized by high strength to unit weight, poly(ethylene terephthalate) (PET) remains one of the most widely used engineering plastics, hence the attention to its associated waste and recycling technology development has been paid from academic and industrial perspectives. Herein, we investigate the mechanical degradation of PET through degradative compounding process cycles and the effect of chain extender (Joncryl® ADR 4468) to prevent molecular degradation of PET during melt processing. They are characterized based on rheological and mechanical measurements. Characterization of the bottle-grade PET samples reveals low viscosity and crystallinity owing to isophthalic acid units within the PET copolymer structure over PET homopolymer. Mechanical shear and thermal impact by virtue of the increase in rotor speed and temperature are employed to study the degradation of the PET samples. Both samples respond to degradation in successive processing cycles with as much as 70% decrease in their complex viscosity and moduli. The molecular weight of PET copolymer accordingly decreases from 23,400 to 8010 g/mol. Chain scission arising from thermo-mechanical degradation results in high crystallinity by more than five folds in the processed PETs. Attributed to recoupling of the degraded short chains, the chain extender compensates with the increase in viscosity and moduli up to 20% whilst serving to increase crystallinity but almost ineffective in appreciating mechanical performance with barely any significant variation in tensile strength and elongation at break. This study shows that mechanical shear is verified to impact a pronounced degradation on PET more than thermal action on the samples.