Polylactic acid (PLA) and lyocell fibres blend can offer an eco-friendly alternative to commonly employed blend of polyethylene terephthalate (PET) and cotton fibres in textiles. PET fibre is non-biodegradable and depletes fossils fuels and adds to landfill sites whereas conventional cotton, dominant part of global cotton production, requires large quantity of water and pesticides during its production. In this study, 100% PLA, 100% lyocell and PLA-lyocell (PL) blended yarns, in varying ratios, were ring spun and subsequently weft knitted and compared with the PET/cotton blend (50/50). The yarns were evaluated for tensile properties while the fabrics were investigated for bursting strength, bending length, pilling propensity, water vapour resistance, thermal resistance and air permeability. The economic comparisons of the two blends were also included. The results indicated that comparatively PL blends (in particular lyocell fibre rich blends) can offer environmental and performance advantages compared to PC blended knitted fabrics for casual summer clothing and active wear.