There are several different kinds of embroidery software packages. Of course there are embroidery software packages for commercial use, but the focus here is on embroidery software for personal use – especially machine embroidery software (although some packages have features that make them useful for commercial projects, at a price individuals can afford).

Some embroidery software programs (some cross-stitch programs, for example) computerize the production of diagrams or charts, so that an embroiderer can use them for hand-stitching guides. To create the chart, the user selects a square (or group of squares) on the grid and applies characteristics like the color and type of stitch. Some packages can also create a design chart from a scanned image. A few hand embroidery programs also have the ability to create charts that machine embroidery software recognizes.

Other embroidery software packages are for use with home embroidery machines. They control all the steps of getting designs to the point where they can be stitched out, from creating the design file to transferring it to the machine.

Embroidery software for both hand and machine embroidery falls into three main categories: design editing, digitizing (design creation), and cataloging and data management. The division between these activities are not always clear-cut, so these functions may be spread over several parts of an embroidery software package.