Copolyesters were prepared by melt-phase polycondensation of poly(ethylene terephthalate) (PET) prepolymer and a thermotropic liquid crystalline polymer (LCP), 60 mol% p-hydroxybenzoic acid and 40 mol% poly(ethylene terephthalate) (PHB60/PET40). The copolyesters were characterized using gel permeation chromatography (GPC), nuclear magnetic resonance (NMR), thermal analysis, and wide angle X-ray diffraction measurement. The molecular weights of final copolyesters decreased with the addition of LCP. GPC results indicate that chain scission reaction of LCP occurs accompanied by chain-growing reaction of PET. From NMR analysis, LCP added underwent transesterification resulting in statistical reorganization of chain sequence with producing ether type by-products responsible for limiting the chain growth of copolyesters. It was observed that the crystallization of PET was delayed and melting temperature decreased with increasing LCP content in copolyesters. The resulting thermal properties and structural regularities of copolyester can be modified by exchange reactions during preparation.