Designer: Monica Solorio-Snow 
5×20" rectangle white felted wool (stem pocket, appliqués, needle flaps)
4×12" rectangle red felted wool (mushroom cap)
6-1⁄2×3" strip aqua felted wool (loop)
Embroidery floss: red and white
Finished needle case: 5×6-1⁄2" (excluding loop)
Cut pieces in the following order.
Felted wool is available in many quilt shops. If you want to felt your own wool, machine-wash it in a hot-water-wash, cool-rinse cycle with a small amount of detergent; machine-dry on high heat and steam-press.
Click on "Download this Project" above for pattern pieces. To make paper templates, trace each pattern on paper and cut out. Pin patterns to felted wool and cut around the edges. Because felted wool pieces won’t fray, there’s no need to add seam allowances or turn under edges.
From white wool, cut:
1 each of patterns A and B
2 of Pattern C
9 of Pattern E
From red wool, cut:
2 of Pattern D
Assemble Needle Case
Use two plies of embroidery floss to finish the edges of all felted wool pieces and assemble the pieces in the following steps.
1. Using red floss, blanket-stitch around a red wool D mushroom cap beginning at green dot and ending at white dot, attaching cap to white wool A stem (Diagram 1).
To blanket-stitch, pull needle up at A, form a reverse L shape with the floss, and hold the angle of the L shape in place with your thumb (Blanket Stitch Diagram). Push needle down at B and come up at C to secure stitch. Continue in same manner.
2. Using white floss, blanket-stitch top edge of white wool B stem beginning at green dot and ending at white dot (Diagram 2).
3. Using white floss, blanket-stitch white wool B stem to white wool A stem beginning at green dot and ending at white dot, joining side and bottom edges of stem pieces and sewing top edge to red cap, to make stem pocket and mushroom back (Diagram 3).
4. Using white floss, blanket-stitch around the outer edges of each white wool C piece.
5. Referring to Appliqué Placement Diagram, position white wool E circles on remaining red wool D mushroom cap. Trim circles even with edges of cap where necessary. Using white floss, blanket-stitch around edges to appliqué E circles.
6. Fold aqua wool 1⁄2×3" strip in half crosswise. Place mushroom back, pocket side up, on flat surface. Referring to Diagram 4, stack white wool C pieces (needle flaps) together and position on mushroom back. Insert folded aqua wool strip between C pieces with ends extending into center of C pieces about 1⁄4". Position appliquéd D piece on top; pin layers.
7. Using red floss, blanket-stitch edge of appliquéd D piece only beginning at green dot and working counterclockwise toward white dot (Diagram 4). At white dot, continue blanket-stitching through all layers to join pieces. End stitching at green dot to complete needle case.