A hand-tufted rug is less time consuming to produce and lower in price than a hand-knotted rug. To create a hand-tufted rug, an artisan uses a hand-tufting tool to hook each piece of yarn. Hand-tufted rugs feature scrim and a heavy cotton or canvas backing to anchor the stitches. The rug is sheared across the top, which cuts the loops and creates the pile on the surface of the rug. The hand-tufted rug is an increasingly significant part of the Oriental carpet market. Because the simple method of weaving, the artistry of these rugs is in the individual designer or creator. Artists will often create abstract paintings beneath the yarn, which can contain high quality wool or silk. Indian hand-tufted rugs are made slowly and almost entirely by hand, whereas Chinese hand-tufted carpets are made with a large compressor machine.

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