Bitumen modification is an important solution to reduce the scarcity of bitumen and to advance the overall properties and performance of bituminous mixtures. Polyethylene terephthalate (PET) can be used as a modifier after conversion to bis (2-hydroxyethyl) terephthalamide (BHETA) to produce PET derived polyurethane by in situ polymerization reaction. The main task of this work is to investigate the potential of PET derived polyurethane polymer in modifying the properties of bitumen. BHETA was synthesized from PET by aminolysis reaction and characterized. The band shifting of ester group of PET into amide groups of BHETA was confirmed by the Fourier Transform Infrared spectroscopy (FTIR) analysis. The thermal property of the produced monomer was examined using Differential Scanning Calorimetry (DSC) and its melting point was 202.76℃. In-situ polymerization of BHETA and toluene diisocyanate (TDI) to produce polyurethane in the presence of bitumen with sulphur as a cross-linking agent was performed. The amounts of cross-linking agent (0.1, 0.2 and 0.3% by weight of bitumen), reaction temperature (120, 130 and 140℃) and the percent replacement of bitumen by polymer (3, 4 and 5% by weight of bitumen) were the parameters that determine the properties of modified bitumen and are considered as factors for effect analysis. Base and modified bitumen were characterized by high temperature performance grade, multiple stress creep recovery (MSCR), and the formation of polyurethane linkage in a polymer (generated in-situ) with FTIR spectra. The best results of in-situ modification was obtained at a reaction temperature of 130℃, polymer content of 4% and sulphur content of 0.2%. At this condition, the high temperature performance grade of base bitumen was modified by two grades i.e. from 58℃ to 70℃ and the non-recoverable creep compliance was modified by 81.82%. The FTIR spectra of modified bitumen confirmed the formation of urethane linkage. Therefore, utilization of waste PET for improvement of flexible pavement is an alternative to satisfy the demand and improve the quality of bitumen.