Abstract: Rigid polyurethane and polyisocyanurate foams are prepared by reacting an excess of an organic polyisocyanate with an etherified modified aromatic polyol. The etherified modified aromatic polyol is prepared by digesting scrap polyalkylene terephthalate polymers with a low molecular weight polyol. The digested polyol is reacted with a low molecular weight polyhydroxy compound containing from about 3 to about 8 hydroxyl groups to form an intermediate product which is alkoxylated with 1 to 4 mols of ethylene oxide and/or propylene oxide to produce a low viscosity etherified modified aromatic polyol which displays excellent stability over long term storage. The etherified modified aromatic polyol is useful in the manufacture of good quality polyurethane and polyisocyanurate foams having improved properties.