To deal with the complexity of recycling, a wide variety of models have been developed, each serving a specific purpose. Despite the current trend increasing international trade in recycling-related material flows, the international dimension of physical and economic relationships in recycling is often ignored in current models and analyses. This paper develops a formal model of an international material-product chain (MPC) that represents the mechanism behind international recycling. The attention is focused on the case of a developed and a developing country that exchange material commodities, final products and recyclable waste. Among others, the model demonstrates that taking into account environmental externalities results in higher levels of recycling. Moreover, we show that international recycling is mainly driven by regional differences in the quantity and quality of factor endowments and economic efficiency of recycling. Given that industrialised countries are relatively well endowed with recyclable waste, the recovery rate usually exceeds the utilisation rate. In developing countries, an opposite pattern is observed. © 2005 Elsevier B.V. All rights reserved.