This paper is aiming to develop high shrinkable differential shrinkage and mixed fibre nylon composite yarns by applying the high shrinkable polyester manufacturing technology. The wet and dry thermal shrinkages and mechanical properties of developed nylon composite yarns are measured and discussed with processing factors in the spinning and texturing processes. And the effects of the processing factors on the physical properties of high shrinkable nylon composite yarns are investigated. For this purpose, twenty seven nylon 30d/12f SDY were prepared with variation of spinning temperature, 2nd godet roller temperature and draw ratio on the spinning machine. The optimum spinning condition which showed maximum wet thermal shrinkage and stress was determined and high shrinkable nylon 30d/12f SDY spun under this optimum condition used as a core and three kinds of regular nylon filaments used as sheath were processed on the texturing machine with variation of 1st and 2nd heater temperatures. The optimum texturing process condition was decided through analysis of dry thermal shrinkage of these core and sheath nylon filaments. Finally, high shrinkable differential shrinkage and mixed fibre nylon composite yarns were made under the optimum texturing condition on the texturing machine, its wet thermal shrinkage was 13.8 %, which was much more higher than that of regular nylon composite yarns. The differential shrinkage effect of the developed nylon composite yarns was found in the yarn surface and cross section profiles by microscope and SEM.