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Polyethylene terephthalate (PET) is an interesting flexible substrate material for many applications in electronics since it is inexpensive and has good mechanical and electrical properties. Due to these good properties there is increasing interest in using PET in applications involving harsh environments. However, PET has relatively poor thermal properties, which may cause reliability concerns in demanding conditions. Above its glass transition temperature, Tg, PET is susceptible to hydrolysis, which may considerably restrict its use. Hydrolysis breaks the molecular structure of PET and makes the material mechanically unreliable. This paper reports the reliability of PET films in an LCD display application and in RFID tags in thermal and humid conditions. Additionally, neat PET films were studied. Several thermal cycling and humidity tests were used. The results clearly showed that above the Tg of PET the combined effect of humidity and high temperature caused PET to become brittle leading to considerable reliability problems. However, in dry thermal cycling conditions and in humid conditions below the Tg of PET, the reliability of PET was found to be excellent even under prolonged exposure.