Deciphering a yarn label can be a confusing task for a new stitcher, especially when experimenting with new yarns and textures. I have created a compact reference for reading a yarn label and also included some reading suggestions to dissect more complicated labels as well as care/washing symbols.
1) Brand Name: Common brands in chain craft stores include Red Heart, Lion Brand, Bernat and Patons
2) Fiber Content: This details the kind of fiber and if it is a blend how much of each fiber is included. Various fiber blends have different care instructions. Read more about yarn in the Basics 101 section.
3) Weight: Yarn is sorted by weight categories to easily match pattern equivalents. A chart of yarns by weight is available at http://www.craftyarncouncil.com/weight.html
4) Color and Dye Lot: Yarn that is dyed in lots references its code on each label. It is best to purchase matching dye lot skeins for a single pattern to prevent color variation.
5) Category: This a commonly used symbol to categorize yarn by weight (if not listed on the label).
6) Recommended Hook & Needle Size: Yarn labels often feature a suggested hook or needle size to obtain the proper 4×4” gauge (often referenced in patterns) when using this yarn. Checking your gauge is an important predecessor to beginning a pattern to insure your project will be the desired size.
7) Care Instructions: These symbols represent various cleaning suggestions based on the yarn fiber content. It is very important to follow these instructions if you do not want to alter the texture and size of the yarn. Some yarns are used with the intent to shrink the fiber and create a new fabric in a process called felting. Felting yarns are 100% wool and often recommend care instructions to avoid felting the fabric on purpose. Find more Yarn Label Symbols at: http://www.skeinlane.com/knittingresources/care/caresymbols.htm
Read more about Unraveling a Yarn Label at http://www.dummies.com/how-to/content/unraveling-a-yarn-label.html
As always the Craft Yarn Council of America has an amazing set of resources at www.craftyarncouncil.com. They are to knitters/crocheters as Giles was to Buffy.