Blends of poly(ethylene terephthalate-co-p-oxybenzoate) (PET-PHB) with poly(ethylene terephthalate) (PET) have been studied in the form of as-spun and drawn fibers. Mechanical properties of drawn blend fibers (DR-6.0) up to 10 wt % liquid crystalline polymer (LCP) component exhibit significant improvement in modulus and strength. With the addition of 10 wt % LCP content in PET matrix, the modulus increases from 11.78 to 17.72 GPa, and the strength increases from 0.76 to 1.0 GPa in comparison to the PET homopolymer. With further addition of LCP content, the properties drop down. Scanning electron microscopy studies of drawn blend fibers show that up to 10 wt % LCP content the blends contain the LCP domains in the size range of 0.07-0.2 mu m and are well distributed in the PET matrix.