The kinetics of tetrabutyl titanate catalyzed transesterification of dimethyl terephthalate with poly(tetramethylene ether) glycol of various molecular weight has been studied in the presence and absence of 1,4-butanediol. Detailed analysis of experimental data with a proposed kinetic model indicates that the equal reactivity hypothesis for functional groups is valid within a wide range of experimental conditions studied. It is also found that the reactivity of hydroxyl groups of macrodiols such as poly(tetramethylene ether) glycol is independent of the chain length of the polymer. Effect of various reaction parameters on the transesterification rate and the resulting product composition is also discussed.