There are a few possible reasons your towels might be getting that musty, mildewed smell:
1. Too much detergent. Solution: Check the directions on the detergent bottle and make sure you’re using less than the recommended amount. Too much detergent leaves a residue, especially when you have a high-efficiency washer that uses less water. I never use fabric softener on towels; it coats towels with a residue which makes them less absorbent.
2. Clean towels aren’t completely dry when they’re folded and put away. Solution: make sure they’re totally dry, not just hot.
3. It’s coming from the washing machine. Solution: Leave the washer door open after every load to let it dry. Once every few months run a cleaning cycle on your washer to remove mildew, soap scum, and hard water deposits. To do this, add either a cup of bleach or two cups of white vinegar to the washing machine and run a hot-water wash cycle while it’s empty.
4. The towels aren’t drying quickly enough after using them. This was my problem a few weeks ago. I had towels that every week smelled a little less fresh, and I realized those towels are always hung on hooks. Solution: Hang wet towels on towel bars or spread across two hooks until they’re dry.
So what do you do to remove the mildew smell from towels?
Wash the towels using a regular amount of detergent and add a booster such as non-chlorine bleach, borax, or baking soda. Use hot water. Add one cup of white vinegar to the rinse cycle. Dry the towels in the sun (if it’s rainy or the middle of winter, you can use the dryer).