PURPOSE: To provide a polyester yarn having high strength and high shrinkage capacity and its production method.

CONSTITUTION: This fully oriented polyester yarn is produced by spinning a spinnable polyester at high speed and has a novel combination of high strength, high elastic modulus and enhanced shrinkage capacity. The spinnable polyester is based on polyethylene terephthalate modified by incorporating as cocondensed units 4-10C aliphatic dicarboxylic acids by such an amount that the glass transition temperature of the polyester is 70°C or below, the recrystallization temperature of the polyester is 180°C or below and the heat of fusion of the polyester is 30 J/g or below according to DSC measurement. The polyethylene terephtalate may further contain up to 5 wt.% other additives usually used for reforming polyethylene terephtalate.