Polyols of palm olein/polyethylene terephthalate (PET) were synthesized by means of incorporating recycled PET from waste drinking bottles in different proportions into palm olein alkyd in the presence of ethylene glycol. The polyols were characterized by FTIR, and theirs hydroxyl value (OHV), acid value (AV) and viscosity were determined. The formulation of the polyurethane coating was carried out by dissolving the polyol in mixed solvent of cyclohexanone/tetrahydrofuran (THF) (4 : 1) followed by reacting 1 hydroxyl equivalent of the polyol with 1.2 equivalents of methylene diphenyldiisocyanate and 0.05% dibutyltin dilaurate (DBTDL) catalyst. The coating cured through the cross-linking reactions between hydroxyl and isocyanate groups. The formation of urethane linkages was established by FTIR spectroscopy. The set films were characterized by thermal analysis. To study their anticorrosion properties, polarization measurements and EIS in 3.5% NaCl solution were determined. The coatings displayed good thermal stability and anticorrosion properties which were supported by XRD analysis. The PU7 coating, with the highest proportion of PET (up to 15% w/w), displayed significantly improved thermal stability and anticorrosion properties. It is evident that the performance of the polyurethane (PU) coatings could be enhanced by the incorporation of PET.