Production and disposal of car tyres are major contributors to environmental damage. The first stage in tyre rubber recycling is granulation to smaller particle sizes. The sub-optimal physical, mechanical and chemical properties of mechanically ground tyre rubber (GTR) when incorporated into recycled blends are major obstacles to wider use of this potentially sustainable, recovered resource. Consequently, newly manufactured tyres contain less than 5% recycled material. This study compares two types of GTR product: mechanically ground crumb (MGC) and ultrahigh pressure waterjet-produced rubber crumb (WJC). A novel image analysis method showed that when the two particle types were compared, MGC was associated with both greater convexity and sphericity: the geometric mean ratio of MGC/WJC sphericity was 1.67. When part-recycled rubber blends comprising 30% crumb of particle size < 300 μm were compared to virgin polymer, the WJC blend exhibited superior mechanical properties to the MGC blend. These results can be explained by the higher surface area to volume ratio of WJC when compared to MGC which results in strong bonding in new blends using WJC. Further analysis by scanning electron microscopy (SEM) elucidated significant shape and textural variation within the WJC sample, allowing grouping into two sub-categories: “W1” which comprises particles with complex geometries, and “W2” particles which have a relatively simple topology that is similar to MGC. Maximising the W1:W2 particle ratio is likely to be crucial to the optimisation of output quality in the WJC process, and so a composite model is proposed that unifies three well-established fluid effects: brittle fracturing, impact cratering and cavitation. Impact cratering and cavitation effects should be maximised by altering process parameters with the aim of producing a higher proportion of crumb with a more irregular surface morphology to achieve better bonding properties in recycled rubber blends. It is anticipated that this improvement in processing will allow more recycled material to be incorporated into future car tyre production, thereby closing a significant loop in the circular economy.