The work is aimed to investigate the suitability of poly (γ-glutamic acid) (γ-PGA) for the hydrophilic finishing of polyester fiber. γ-PGA hydrogel was successfully synthesized by a simple mixture process in the aqueous solution. A novel hydrophilic finishing agent was prepared by γ-PGA hydrogel. The rheology behavior study indicated that γ-PGA solution and hydrophilic finishing agent performed pseudoplastic fluid and approximately Newtonian behavior, respectively. The particle diameter determined that particles in hydrophilic finishing agent reached micro-nanograde. Furthermore, polyester fiber was treated with γ-PGA solution and hydrophilic finishing agent. Moisture regain was evaluated as a key performance, results shown the hydrophilicity of polyester fiber was greatly enhanced by γ-PGA finishing.