After you've knitted the fabric for your felted project, place it in a mesh lingerie bag and put it in the washing machine with Ivory Flakes or shampoo (avoid detergents), along with other lint-free items such as old T-shirts or jeans -- they provide the necessary friction as the machine agitates to promote the felting. Do not hand-wash the item -- without the agitation of the machine and the friction of the other items, the fabric will not felt.
Successful felting occurs when the stitches visually disappear. But there are times when it's a good idea not to let the felting go too far, especially when you're felting with novelty yarns or when fit is important, as in mittens or hats. Remove the felted item from the washer when you think it has reached the size you want. You can always put it back in for another washing if you want it smaller. If you remove it in the middle of a wash cycle, hand-rinse it in cold water, and then roll it in a towel to remove excess water.
Don't put a washed felted item in the dryer at any time. Machine-drying does not promote felting; it only promotes shrinkage. Let the felting process do the shrinking. You'll find that felting will shrink your item from 15 to 20 percent across its width and from 25 to 40 percent in length.
Shape your project as soon as you remove it from the washing machine. Stretch it, pull it, and, if appropriate, stuff it until it becomes the shape you want. Use items around the house to hold the article's shape as it dries. For example, tuck a book wrapped in plastic snugly inside a straight-sided item. Stuff plastic bags around curved shapes, much as you would stuff fiberfill into a soft toy. Keep the "stuffing" in the project until the shape is established and the article is almost dry. Then remove the stuffing, and let the item dry completely, allowing up to two days.
If you don't like the way an item is shaping up, wet it and reshape. For a soft and fuzzy finish, brush the item with a wire brush after it is completely dry.
If you're new to felting, make a swatch, wash it, and observe how the swatch transforms itself to become a totally new "thing." Note how the swatch changes in appearance and size with each successive washing.
Write down the yarn you've felted. Be sure to include such information as the needle size you used, the number of stitches, the size of the swatch before felting, and the number of washings. Next time, you'll have a felting record for that yarn.
To make felted embellishments of a contrasting color, knit a straight piece of stockinette stitch, felt it by washing it at least twice, cut out the shapes you want, and then wash them once more to soften the blunt cut edges. Or consider buying wool sweaters at garage sales for the same purpose. Wash them twice and then cut them into the desired shapes.