The introduction of graphene into a polymer matrix can markedly improve its mechanical properties and electrical conductivity. We report herein a novel strategy to fabricate polyester/reduced graphene oxide composites via simultaneous dispersion and thermo-reduction of graphene oxide (GO) during in situ melt polycondensation. The pristine graphite was first oxidized using a strong oxidant acid to prepare GO, and then GO sheets were dispersed into ethylene glycol (EG), where a homogeneous dispersion of GO in EG was obtained with ultrasonication. Finally polyester/reduced graphene oxide composites were prepared via in situpolymerization of terephthalic acid (PTA) and ethylene glycol containing well dispersed GO. Fourier transform infrared spectroscopy (FTIR), thermogravimetric analysis (TGA), X-ray photoelectron spectroscopy (XPS) and sedimentation experiments have been used to characterize the prepared composites. It is demonstrated that poly(ethylene terephthalate) (PET) chains may have been sucessfully grafted onto GO sheets during polymerization, accompanied by the thermo-reduction from GO to graphene. The TGA and XPS results showed that the content of grafted PET polymer was about to 60–80%, which indicates a homogeneous dispersion of GO sheets in the PET matrix, as demonstrated by SEM. Furthermore, a significant improvement in tensile strength and elongation at break of PET has been achieved. Therefore, our work provides a new way for the preparation of polyester/reduced graphene oxide composites and functionalization of graphene.