Abstract: The invention relates to a beach towel, which converts to a compact tote bag incorporating externally accessible pockets for carrying various accessories. The beach towel is formed from a large rectangular section of flexible, absorbent fabric and a second smaller, multi-paneled rectangular towel consisting mostly of the same or similar fabric as the large towel. The small towel overlies the upper one-quarter section of the large towel and the two are stitched together along the center and periphery of the small towel. Pockets with zippered closures are provided on the outside face of the small towel, and its center section is made from a flexible perforated screen or mesh fabric to facilitates escape of dirt and sand particles entrapped within the pockets. The towel converts to the tote bag configuration by folding it twice along the transverse axis and once along the longitudinal axis.