In Part I, 20% owf DCCA treatment of wool fabric provided complete shrinkage control, but yellowness and deterioration of fabric handle resulted. In Part II, a modified 20% owf DCCA treatment overcomes these limitations. This is an improvement over the conventional two-step process in which DCCA chlorination is followed by resin application to prevent shrinkage in wool fabrics. In step 1 of the treatment, gluconic acid (GA) is applied with DCCA. After neutralization and antichlorination, GA is applied with hydrogen peroxide (H2O2). The role of GA is to moderate the harsh effects of DCCA and H2O2 as documented by scanning electron micrographs of the fibers and improved surface properties of the fabrics. Although the level of DCCA is high, all released chlorine is consumed, and residual chlorine found in spent baths is less than 2%. This modified DCCA system can serve as a model for choosing components when designing alternative systems to chlorination for shrinkage control.