Collect old wool sweaters and/or scarves in different colors and textures.
Separate wool items by color and machine-wash each color separately in hot water; rinse in cold water. Dry each color separately in a dryer at the hottest setting. This hot-cold process will shrink the wool into thick felt that won't fray, even when cut.
Cut one large square or two rectangles that slightly overlap for the pillow back. Cut rectangles, squares, strips, or circles from the wool and arrange them in a pleasing design for the pillow front. Pin the pieces in place.
Sew the pieces together by hand or machine. Sew the front to the back around three edges and insert a purchased pillow form.
Slip-stitch the opening closed, or cut buttonholes and sew on coordinating buttons.