The textile industry is now focusing on sustainable approaches due to environmental concerns. The study explores an innovative approach to sustainable production utilizing recycled cotton sourced from hard waste. The article examines the characteristics of rotor yarns (recycled) manufactured from seven different percentages of recycled and virgin cotton, ranging from 0% to 100% recycled cotton. The study investigates the influence of cotton (recycled) percentage on yarn characteristics and results indicate when recycled cotton percentage in yarn increases, irregularity (CVm%), hairiness (H), and imperfections index (IPI/km) of yarns increase but strength and elongation% decrease. The study focuses on reducing the environmental issues of denim production by incorporating sustainable recycled cotton. Statistical analysis (Pearson correlation) confirms significant correlations (relationship) between recycled cotton proportion and yarn characteristics. The rotor yarns were tested in an air-jet weaving machine for denim production and found suitable for commercial production. The study gives significant insights into manufacturing sustainable yarns incorporating recycled fibres, focusing on environmental issues.