As a result of knitting's immense boom in popularity over the past few years, yarn manufacturers have made special efforts to create unusual and creative yarns to appeal to the young, affluent, professional women (and men!) who have been taking up the hobby in droves, or rediscovering it after years away. Some of these yarns are luscious and lovely; others are hideous and tacky; but in either case, many of them are the sort you never would have been able to find fifty or even twenty years ago.

If a knitter hasn't visited a LYS in a few years, one surprise she might encounter is the proliferation of variegated yarns, which is to say, yarns which change colour from time to time within a single ball or skein or hank.

The varieties of variegated yarn

In my grandmother's day, hand-dyed yarns might be naturally slightly variegated as a result of the changing concentrations of dyes in the kettles, or a ball of cheap acrylic yarn might alternate between a garish green and an equally garish red for the Christmas holidays. But today, variegated yarns come in hundreds of different varieties: the colours might change after you've only knit a few inches' worth of yarn, making the final knitted fabric look speckled, or they might change very slowly over the course of many metres, creating wide bands of colour in the final product. Needless to say, the effects are going to depend in part on the length of your rows; even a slow-changing variegated yarn might make narrow stripes in a man's sweater, while the same yarn might make an entire baby sweater without changing very much at all.

The colours in your chosen colourway might be closely related, invoking the palette of autumn or the sea or a forest. Or they might clash cheerfully and kaleidoscopically, making the final result look like a child's experiments with finger paint. Some yarns are even "self-striping," saving the knitter the bother of switching balls as she progresses along the length of a sock or a hat.

The colour changes in a variegated yarn might follow a predictable order: blue, green, yellow, blue, green, yellow, blue, green, yellow. (Fussy sock knitters will sometimes cut out huge lengths of yarn just so that each stripe on each sock can start in exactly the same place, but I for one prefer fraternal twins to identical twins in sockdom.) With other yarns, however, the changes might be irregular, thwarting the intentions of even the most OCD knitters. I had a friend who bought a hank of yarn in a dark, moody colourway, only to discover a flash of bright yellow buried inside it when she wound it into a ball. Who would have thought that yellow could be sneaky?

How yarn gets variegated

The appearance of a variegated yarn depends greatly on what technique was used to dye that yarn. For example, a "painted" yarn is going to look different from a "kettle-dyed" yarn. Someone who is applying blotches of dye to a skein by hand will guarantee that the knitter will encounter that colour at regular intervals as she loops around to that spot in the skein; the length of the changes in this case will depend on how large the loops are at the time it is painted. A yarn painter can also pick wildly differing colours to paint with and can, to some degree, prevent them from overlapping, creating yarns with bold colourways.

A yarn that's been dyed in a kettle, by contrast, will probably have less variety in colour, since the entire hank will be sitting in the same water and soaking up the same batch of dye. However, the colour changes will also be less predictable, since dye in a pot will have no reason to respect the shape of the hank and will not make the "loops" that a painter might. It's also possible for the dye to miss some areas in a badly-stirred hank, creating the knitter's equivalent of lumps of undissolved powder in a glass of Quik.

Keep in mind too that not all yarns are dyed after they are spun; some are dyed earlier in their careers, as roving or top, which will look subtly different from yarns that were dyed as yarns.

However, in all cases there are going to be exceptions to these rules. A friend and I once experimented with using Wilton's Icing Dye to dye yarn, after hearing rumours that certain dark colours would "split" attractively within the kettle. Sure enough, a teaspoonful of black dye, when stirred into a stockpot filled with warm water, separated into eddies of green, purple, and grey. The final result was gorgeous, but we will never be able to reproduce it; each batch of dye will behave slightly differently.

What could possibly go wrong?

Knitting with variegated yarns presents some challenges. For example, some knitters are concerned about pooling or flashing, two problems that never occur when knitting with a single colour. Pooling is when the same colour happens to appear at the same place in a row for a large number of rows, breaking up the variety with a single glom of colour just sitting there. Pooling yarns can look very beautiful, creating an almost tie-dyed effect, but occasionally they are heavy and strange and draw too much attention to themselves. Flashing takes place when the eye is drawn to a certain, too-short, too-predictable colour repeat: if there is a regular sequence of bright orange strands, for instance, they may streak across the finished garment unpleasantly.

Some knitters welcome these colour effects, accepting them as the cost of the chaos of knitting with variegated yarns. Others use certain tricks to avoid them, such as knitting with two strands of the yarn at a time, alternating balls from different dye lots, or playing with techniques like entrelac and slip stitch. Note too that some projects look too noisy if they're done in a variegated yarn; most lace, and some elaborate cable designs, get lost in a circus of colour changes. As with all things in crafts, it is wise to choose the best materials for the project, rather than assuming that a material you like and a project you like will necessarily go together.

Further Information

Do a Google image search on "variegated yarn" to see hundreds and hundreds of examples, both on the skein and as knitted fabrics. Perhaps other crafty sorts will want to contribute reviews of their favourite variegated yarns to this node. I'd be especially keen to hear the experiences of crocheters and other needlecrafters.
A useful site on ways to use variegated yarns to dramatic effect can be found here: http://www.knitting-and.com/knitting/tips/variegated.html