In this research work more emphasis was given to improve the absorbency of terry towel along with imparting anti-microbial property to terry towel fabric. The piles which was chosen were given pre-treatment process followed further with various concentration of citric acid and sodium hypophosphite. This treatment with citric acid leads to crosslinking of the interstices in the yarn thus providing more space for the accommodation of more amount of water. This treated fibers creates a hydrophilic networks which not only absorb but retain the huge amount of water within it. This chemical modification which was achieved by hydrophilic group increases the uptake of water within hydroxyl group of cellulose molecule. The whole fabric along with base and piles were treated with different concentration of aloe-Vera gel showed good anti-microbial property.