Indigo dyed cotton yarn suitable for producing indigo dyed cotton knitwear, and method of producing it, comprising passing a cotton rope consisting of a plurality of yarn threads through a plurality of baths of indigo dyed liquor, allowing the dye to oxidize by exposure to air between each bath, and winding each of the said yarn thread separately to provide an indigo dyed yarn in a form suitable for knitting. The threads are wound onto individual spools, which may be rotated on a common shaft, or by individual motors. The indigo-dyed knitted cotton fabric produced shows the fading by abrasion, rather than washing out, normally associated with denim.