Abstract: A machine for producing chenille yarn has a winding member on which turns of effect yarn are formed. A rotating disc-shaped cutter can be moved into an operative position to cut the turns on the winding member into individual lengths of effect yarn for forming conventional chenille yarn. The cutter can also be moved to a non-operative position remote from the winding member whereby the turns of effect yarn are uncut and the chenille yarn then produced is of the boucle type. The cutter may be moved between its operative and inoperative positions during operation of the machine so that the yarn produced has alternate chenille portions and boucle portions.