This investigation deals with the recycling of polyurethane rubber by the application of high-power ultrasound in a continuous ultrasonic coaxial reactor. The cured rubber has been devulcanized at various feed rates and various gap sizes and then revulcanized again with certain adjustments in the curing recipe. The die pressure and the total power consumption have been recorded as a function of the processing conditions. The rheological and mechanical properties, hardness, gel fraction, and crosslink density of the original, devulcanized, and revulcanized samples have been measured and compared in an attempt to determine the optimum condition for devulcanization. Gel permeation chromatography (GPC) has been carried out with the sol part of the devulcanized samples to study the devulcanization and degradation. The results show that at low flow rates and narrow gaps, the material is degraded very quickly and, therefore, exhibits very poor mechanical properties. However, increasing the feed rate results in an improvement of the mechanical properties. Measured values of the crosslink densities and gel fractions indicate the processing conditions under which greater devulcanization and degradation of the samples take place. The lower molecular weights of the sol, extracted from the devulcanized samples, obtained in the GPC experiments in comparison with polyurethane gum indicate a breakdown of the polymeric chains as a result of devulcanization. The devulcanized samples show a higher activation energy of viscous flow, possibly because of the formation of branched structures.