Machine embroidery is the process of using a sewing or embroidery machine to create decorative stitching on fabric. It is widely used in commercial branding, product decoration, uniform embellishment, and personal customization. Most modern embroidery machines are computer-controlled and rely on digitized embroidery files to execute designs.

The most common stitch types in machine embroidery include the running stitch (a simple line used for outlines or travel paths), the satin stitch (used for narrow, dense decorative elements and lettering), and the tatami stitch (also known as fill stitch, used to cover larger areas). To connect distant parts of a design, embroidery software generates connector stitches—short stitches that may be visible (as jump stitches) or hidden beneath other stitching. At the beginning and end of sections, lock stitches are often used to secure the threads and prevent unraveling.

Free-motion sewing machine embroidery uses a basic zigzag sewing machine and designs are made manually. Chenille embroidery is a decorative technique that uses a looped or tufted yarn to create a soft, velvety texture on fabric. It is typically done with a specialized chenille embroidery machine, where a chain stitch needle and a loop-pile mechanism form raised loops on the surface. This style is often used for varsity letters, patches, and textured logos on apparel.^{[citation needed]}

Before computers were affordable, most machine embroidery was completed by punching designs on paper tape that then ran through an embroidery machine. One error could ruin an entire design, forcing the creator to start over.

Machine embroidery dates back to 1964 when Tajima started to manufacture and sell TAJIMA Multi-head Automatic Embroidery machines. In 1973, Tajima introduced the TMB Series 6-needle (6 colors) full-automatic color-change embroidery machine. In 1978, Tajima started manufacturing the TMBE Series Bridge Type Automatic Embroidery machines. These machines introduced electronic 6-needle automatic color change technology.

In 1980 the first computerized embroidery machines were introduced to the home market. Wilcom introduced the first computer graphics embroidery design system to run on a minicomputer. Melco, an international distribution network formed by Randal Melton and Bill Childs, created the first embroidery sample head for use with large Schiffli looms. These looms spanned several feet across and produced lace patches and large embroidery patterns. The sample head allowed embroiderers to avoid manually sewing the design sample and saved production time. Subsequently, it became the first computerized embroidery machine marketed to home sewers.

The economic policy of the Reagan presidency helped propel Melco to the top of the market. At the Show of the Americas in 1980, Melco unveiled the Digitrac, a digitizing system for embroidery machines. The digitized design was composed at six times the size of the embroidered final product. The Digitrac consisted of a small computer, mounted on an X and Y axis on a large whiteboard. It sold for $30,000. The original single-needle sample head sold for $10,000 and included a 1" paper-tape reader and 2 fonts. The digitizer marked common points in the design to create elaborate fill and satin stitch combinations.

In 1982, Tajima introduced the world's first electronic chenille embroidery machine, called the TMCE Series Multi-head Electronic Chenille Embroidery Machine. In the same year, they developed the automatic frame changer, a dedicated apparatus for rolled textile embroidery. Also in 1982, Pulse Microsystems introduced Stitchworks, the first PC based embroidery software, and the first software based on outlines rather than stitches. This was monumental to decorators, in that it allowed them to scale and change the properties and parts of their designs easily, on the computer. Designs were output to paper tape, which was read by the embroidery machine. Stitchworks was sold worldwide by Macpherson.