Knitting yarn comes in several shapes: on cones, wound into balls or as skeins (also called hanks). Skeins or hanks of yarn need to be wound into balls before knitting with them.
Take the skein and find the place where the bundle is tied together. Make sure that none of the strands cross over at the tie (see illustration). Put the skein over your two outstretched arms and give it a good stretch to straighten out the strands of yarn.
Now put the skein around the back of a chair. The tie is the beginning and end of the skein of yarn. Untie the knot and start winding with one end (it doesn’t matter which one). Wind the yarn around your hand loosely about two dozen times. Pull the bundle off your hand; and—holding the bundle in your hand with the wrapped yarn parallel to your fingers—start wrapping again, this time around the fingers together with the bundle of yarn, wrapping them together. Pull the wrapped yarn with bundle off your fingers; and—holding it in your hand—wrap yarn around your fingers and bundle again. Keep repeating these steps until you have wound the entire skein into a loose ball.
Now you can start knitting with the ball of yarn.