Abstract The main focus of this research is to identify the structural mechanisms that are responsible for changes observed in various stages of coupled mechano-optical (stress and strain optical) relationships as they are influenced by the deformation mode, level and rate. This involves in situ real time studies of the true-stress-strain-birefringence of sequential biaxially stretched PET films using a highly instrumented biaxial stretching machine and ex situ structural studies. These ex-situ studies include wide angle X-ray diffraction, Raman spectroscopy and DSC thermal analysis to examine the orientation, conformation and crystallization behaviors as well as formation of long range connectivity through physical network. The relationship between the stress and birefringence exhibited three Regimes. Regime I, linear relationship with a stress optical constant of 5.8 GPa−1. Regime II, non-linear relationship with the establishment of chain tautness and nematic like two-dimensional order. Regime III, where the chains reach their finite extensibility.