Ground rubber tire (GRT) powders were chlorinated by trichloroisocyanuric acid (TCLCA). GRT powders of different chlorination levels were characterized by X-ray photoelectron spectroscopy (XPS), energy dispersive X-ray spectroscopy (EDAX), attenuated total reflection infrared (ATR-IR) spectroscopy, thermal, dielectric, and stress—strain properties on molded GRT specimens. Surface energy of the powders was estimated. Dynamic mechanical thermal analysis of molded GRT specimen reveals a biphasic structure. Plasticized poly(vinyl chloride) (PVC) compound, when blended with chlorinated GRT, shows improved physical properties in comparison to non-chlorinated GRT.