Governments, institutions and organizations are driving businesses, fashion brands and industries to address the two major causes of pollution in the textile sector and post-consumer apparel by bringing awareness to this issue and promoting sustainable and circular solutions. These solutions require extensive research to create environmentally friendly production techniques, making it extremely difficult to scale sustainable solutions. Since a large portion of textile waste cannot be chemically recycled, a technology for mechanical recycling is considered. A case study on the valorization of textile waste as a new raw material is presented within the scope of the be@t Project using yarns produced at University of Beira Interior from mechanical recycling of pre-consumer waste at J. Gomes Company combined with different proportions of virgin fibers. The characteristics and properties of the yarns were analyzed and compared to those of virgin fiber yarns. To demonstrate the potential of this research, knitted textile samples were produced with recycled fiber yarns and compared with identical samples made with virgin fiber. Laboratory tests were carried out to assess the performance quality of the knits, particularly to assess abrasion and pilling; surface texture; and touch and drape through shear and bending rigidities. The results were discussed, and the respective conclusions were drawn, clearly highlighting the recycled yarn’s potential for the market and for further studies. This work was able to prove that the appropriate use of yarns containing a percentage of mechanically recycled fibers, in the production of knitwear, did not harm the appearance and touch.