The blanket stitch is an overcast style of stitch. It is frequently used as a decorative finish for blankets. It is also a popular finish on felt items. Blanket stitch can be sewn by hand or machine using various weights of thread, floss and yarn. Be sure to match the weight of thread to the fabric you are stitching so that it doesn't overwhelm the fabric or cause the fabric edge to curl over.
Below is a photo tutorial showing how to blanket stitch by hand step-by-step. To practice this tutorial, you will need several pieces of felt. The first tutorial will show the process of sewing two pieces of fabric together and the second tutorial shows how to applique with a blanket stitch.
Thread your needle and make a knot near the end of your thread or yarn. Align the edges of the two pieces that you are sewing together. Insert your needle between the two layers and come up through the top piece of fabric at the desired distance from the edge. Pull thread through until knot is resting against the wrong side of the fabric.
Put the layers back together so that the edges match up. The thread will be coming up through to the right side of the fabric as shown in the photo to the right.
Insert the needle down through both layers at the desired distance from the edge.
Pull the thread through until there is a small loop; insert the needle through the loop from underneath.
Pull on the thread until the loop closes up, but is still slightly loose - you need the slack for closing the loop at the end. You want the loop to look like a "U" - if it looks like a "V", you have pulled the stitch too tightly.
To continue stitching, insert the needle down from the top again. The distance between the stitches should be about the same as the length of the stitch so that the stitch looks closer to a square than a rectangle.
Pull floss through until a small loop remains. Bring the needle up through the loop from below. Pull floss through until the edge of the loop is resting snugly against the edge of the fabrics. If the edge starts to buckle, you have pulled the floss too tightly.