The concept of sustainable and eco-friendly production of textiles has gained significant traction in recent years. Utilizing sustainable raw materials, processes, and recycling methods are fundamental strategies in the development of cleaner and more eco-conscious textile manufacturing. The current work reports a sustainable approach to manufacturing melange yarn from recycled fibers shredded from pre-consumer cotton/viscose mélange fabric waste. The recycled fibers obtained by the shredding method are short and lumpy, necessitating the blending with virgin fibers which serve as carriers throughout the spinning process. In the traditional ring spinning system, the poor inter-fiber cohesion, especially shorter recycled fibers, inhibits achieving the optimum yarn quality. With a view to their better control during spinning, advanced spinning systems such as Siro, compact and compact-Siro spinning were adopted. Experimental results revealed that all these spinning systems led to superior yarn qualities. Among them, yarn produced with compact-Siro spinning demonstrated the most significant improvements in yarn structure (reduced hairiness, unevenness & imperfections) and properties (increased strength & elongation). Through adept engineering and precise process control, 30-Ne (19.68 Tex) melange yarns containing up to 60% recycled mélange fiber were successfully produced. These melange yarns proved to be suitable for manufacturing knit fabrics with aesthetics similar to commercial mélange fabrics. The innovation of producing melange yarn, incorporating 60% recycled fibers, introduces a revolutionary concept aimed at supporting the Sustainable Development Goal (SDG) 12. This initiative aims to reduce the reliance on production of viscose, and cultivating and processing cotton, thereby making significant contributions to environmental conservation in various dimensions. Moreover, embracing this approach offers the potential for cost savings in the production of melange clothing.