Abstract: A low cost method for preparing foamed or aerated asphalt-rubber paving compositions is provided wherein a flowable mixture including respective quantities of asphalt and finally divided reclaimed rubber particles is first directed into a rocket-type reactor along with steam and/or water, thereby subjecting the mixture to conditions of elevated temperature, pressure and shear. Thereafter, the initially reacted mixture is passed into a pressurized, secondary reaction vessel system in order to complete the gelation reaction in a period of, e.g., 7-15 minutes. The preferred apparatus (10) includes a rocket-type primary reactor (12) presenting a confined reaction zone (20); asphalt-rubber and water/steam conduits (42, 48) communicate with the zone (20). The output (24) of the primary reactor (12) feeds directly into a pressurized tank (66) forming a part of the downstream secondary reaction and recovery system (14), where the gelation reaction is completed.