A heat activated applique for apparel and other textile products, and particularly those made out of stretch fabrics (typically knit or woven fabrics) comprised of synthetic or natural fiber yarns constructed with spandex fibers and yarns. The applique includes an upper stretchable fabric layer bonded to a substrate by a thermoplastic adhesive. The stretchable fabric layer is a knit or woven fabric with spandex and polyester or nylon threads, and the thermoplastic adhesive is a urethane-based thermoplastic adhesive with stretch and recovery characteristics. The applique can be layered to provide a three-dimensional characteristic, embossed or etched to provide a surface texture, and adorned with direct printing or sublimation dye. The applique may be easily heat-sealed to a garment or other textile.