The present invention concerns a method for recycling used floor covering. Post-consumer or post-industrial fibrous floor coverings are shredded to form a fibrous dispersion. The dispersion is maintained at a content of about 20-65% low-melt thermoplastic. The shredded fibrous dispersion is conveyed into a chute feeder which converts it into a batt that is heated, compressed, and cooled to form a durable backing particularly suitable for flooring applications. The batt comprises vertical layers or strata of fibers to provide additional cushion for the backing. Additionally, a portion of the shredded fibrous dispersion can also be diverted and used to form a face layer and/or adhesive layer for a reconstituted floor covering.