A novel process has been developed for separation of the cellulose, i.e. cotton and viscose, from blended-fibers waste textiles. An environmentally friendly cellulose solvent, N-methylmorpholine-N-oxide (NMMO) was used in this process for separation and pretreatment of the cellulose. This solvent was mixed with blended-fibers textiles at 120 °C and atmospheric pressure to dissolve the cellulose and separate it from the undissolved non-cellulosic fibers. Water was then added to the solution in order to precipitate the cellulose, while both water and NMMO were reused after separation by evaporation. The cellulose was then either hydrolyzed by cellulase enzymes followed by fermentation to ethanol, or digested directly to produce biogas. The process was verified by testing 50/50 polyester/cotton and 40/60 polyester/viscose-blended textiles. The polyesters were purified as fibers after the NMMO treatments, and up to 95% of the cellulose fibers were regenerated and collected on a filter. A 2-day enzymatic hydrolysis and 1-day fermentation of the regenerated cotton and viscose resulted in 48 and 50 g ethanol/g regenerated cellulose, which were 85% and 89% of the theoretical yields, respectively. This process also resulted in a significant increase of the biogas production rate. While untreated cotton and viscose fibers were converted to methane by respectively, 0.02% and 1.91% of their theoretical yields in 3 days of digestion, the identical NMMO-treated fibers resulted into about 30% of yield at the same period of time.