In order to limit the hydrolytic degradation, recycled polyethylene terephthalate (rPET) was subjected to a heat treatment (annealing) to obtain treated rPET (trPET). To improve the mechanical properties of the latter, it was melt mixed with maleic anhydride grafted styrene ethylene/butylene–styrene copolymer (SEBS-g-MA) which acts as a toughening agent then compared to rPET and virgin PET (vPET). The addition of 20% of SEBS-g-MA revealed a significant increase in the impact strength by 356, 158, and 188% for trPET, rPET and vPET, respectively. This could be explained by the interface reinforcement resulting from the reaction between the functional groups of the trPET and those of the toughening agent, as identified by Fourier transform infrared analysis. On the other hand, the analysis of the thermal properties using differential scanning calorimetry showed that the cold crystallization temperature of the toughened trPET is decreased and its degree of crystallinity varied slightly compared to that of trPET. The dynamic mechanical thermal analysis pointed out that the presence of 20% of SEBS-g-MA in trPET led to a higher storage modulus than that of the toughened vPET. Furthermore, the addition of the toughening agent contributed to a significant promotion of trPET thermal stability.