A two-color laser photometric measurement system was used to follow birefringence changes in annealing of prestretched PET films. This technique was shown to be capable of detecting large retardation (and thus birefringence) changes beyond one wavelength of the fight. The use of green and red lasers in the photometric system allows the detection of the reversals in birefringence during the course of annealing. Unless critical orientation/crystallinity levels are developed by stretching the films, heat setting the films at temperatures close to glass transition temperature results in complete elimination of preferential orientation. At intermediate stretch ratios, crystalline regions form and the act as anchor points establishing a network for the oriented amorphous chains. These films exhibit partial relaxation followed by rapid increase in birefringence due to the accelerating effect of orientation on crystallization. At high stretch ratios, where substantially oriented and strain crystallized structures are obtained, the initial relaxation stage disappears and birefringence continue to increase throughout the heat setting process even at temperatures very close to glass transition temperature. In these films, however. the total change of birefringence decreases as more of the chains are oriented and crystallized in the stretching stage, leaving a smaller fraction of polymer chains to rearrange during the annealing stage. The kinetics of the structural change exhibit a complex behavior and the largest rates of structural changes were observed in films exhibiting intermediate birefringence levels.