Despite the buildup of used clothes, the technology to recycle old textiles into fiber to make new ones has remained embryonic, meaning clothes eventually end up in the dump or incinerator. Textiles in American landfills jumped 67.7% by weight from 2000 to 2015, according to the U.S. Environmental Protection Agency.

So far, companies have focused on improving collection of used clothes. H&M and Zara are rolling out in-store bins to collect garments which are then sold as secondhand clothing, largely to emerging markets, or turned into other products.

But some countries, like Rwanda, have raised taxes on secondhand clothing imports to help domestic-textile production, which has floundered in the wake of a flood of used clothing from countries like the U.S.

There has been little regulatory pressure on clothing makers to take responsibility for the waste generated by their products, unlike the crackdown seen in other areas, such as single-use plastics. France is the only country to hold textile producers responsible for recycling or disposal. The U.K. is considering similar rules.

Garments that are recycled are mostly turned into lower-value products like wiping cloths and insulation, which ultimately hit the landfill. Clothing that does include recycled material typically uses plastic bottles rather than old textiles.

Less than 1% of the fiber used to produce clothes is recycled into new garments, the Ellen MacArthur Foundation says. Part of the challenge of using old clothes to make new ones is that most clothing contains a blend of materials, like cotton and polyester, which are difficult to separate.

The environmental impact of clothing is set to keep growing. Global consumption of apparel and footwear is estimated to rise 63% between 2015 and 2030 to 102 million tons, according to Boston Consulting Group. Studies show the growing popularity of synthetic clothing like fleece jackets and gym leggings is also releasing more tiny plastic particles into the ocean when the garments are washed.

Apparel companies say they are trying to find ways to turn old clothing into new, motivated by the threat of resource constraints and growing concern among consumers about the environmental impact of their buying behavior.

“We know resources will get more and more scarce,” said Cecilia Brännsten, H&M’s environmental sustainability manager. “With climate change there’s more and more pressure on land use so we know we will have to turn to recycled material.”

The H&M Foundation—a nonprofit funded by the retailer’s founding Persson family—is exploring ways to make clothing from existing fiber rather than using new plastic, used to make the majority of clothes, or cotton.

Proponents of so-called closed-loop recycling say making new clothes from old would reduce greenhouse-gas emissions and the consumption of oil, which is used to make synthetic fibers; fertilizers and water, used to grow cotton; and chemicals used to produce, dye and finish fibers.

The H&M Foundation recently opened a pilot textile recycling plant in Hong Kong that uses chemical and hydrothermal technology to recycle cotton and polyester blends into new yarns. Polyester is recovered in fiber form, which can be respun. Recovered cotton breaks down into a cellulose powder, but the organization is still looking for a way to use this. It says the technology will be available for the industry to use, potentially next year.

Inditex is funding textile recycling research by the Massachusetts Institute of Technology and says by next year it will have invested $3.5 million in closed-loop technology. It is also working with Lenzing, an Austrian producer of plant-based textiles, to make new fiber from its cotton waste.

Before clothing can be recycled it must be sorted. A group of European companies is developing a system called Fibersort that can automatically separate large volumes of garments by fiber. Clothes made of a single material are identified using scanners and then sorted, so they can eventually be made into new garments.

While efforts to recycle old clothes into new are still nascent, Americans are increasingly shopping for secondhand clothing. Companies say that is driven by consumer desire to save money, help the environment and avoid appearing in the same clothes twice on social media platforms like Instagram.

J.C. Penney

and

Macy’s Inc.

in August said they would start selling secondhand clothing from online marketplace thredUp Inc. Thredup says the U.S. resale market has grown 21 times faster than the overall retail apparel market over the past three years. J.C. Penney Chief Executive

Jill Soltau

told investors there were “more secondhand shoppers than ever before” citing “an emotional thrill that comes with finding a high-quality secondhand product for much less.”

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com