Abstract: The present disclosure relates to a continuous process for preparing hydrophobic regenerated cellulosic fiber. Said process comprises treating never-dried cellulosic fiber with a hydrophobic composition comprising 0.05-2.5 weight % of an alkyl ketene dimer based on weight of cellulose. The alkyl ketene dimer has a formula I: wherein both R1 and R2 are hydrocarbon groups having 8-40 carbon atoms and which can be both, saturated or unsaturated, straight-chained or branched. The hydrophobic composition further comprises 0.02-1 weight % of a cationic polymer based on weight of cellulose. After treatment with the hydrophobic composition, the treated fiber is subjected to a drying step to form hydrophobic regenerated cellulose fiber.