It's time to full/felt your sweater! For the best results make sure you are starting with a minimum of 85% wool. In order to full woven wool you need to subject it to moisture, heat, agitation and preferably soap. You can do all of this by hand, but why bother? I suggest you use your washing machine; it's quicker and cleaner!
Depending on your ultimate goal for the fabric, you may want to cut the sweater apart before fulling it. The wool will felt differently around the ribbing at the neck, cuffs and waist as well as the front edges for cardigans. If you need very flat, smooth sections of fabric for your project you may cut the sweater apart at all of the seams and cut off the ribbing before continuing. If you want the ribbing for your project, just throw the whole sweater in. Either way works.
Set your washing machine to the lowest water setting with the longest agitation cycle on the Hot Wash/Cold Rinse setting. If you are fulling more than one sweater make sure they are close in color; darker colors will bleed out a bit and make light sweaters look dingy.
Add two tablespoons (eyeball it) of detergent and two tablespoons of vinegar to the water. The detergent helps the scales on the surface of each strand of wool raise, enabling them to become enter twined with each other, which is what causes the fulling or felting. The vinegar helps freshen the fabric and removes any chemical odor from previous dry cleaning. If your sweater looks a little dingy you may also add a tablespoon or two of baking soda at this point; it works wonders for brightening up dull looking wool.
If you are planning on running several sweaters through your washing machine it is a good idea to use a sweater bag (similar to a lingerie bag, but larger), a zippered pillow case, or even a pillow case with a knot tied in the end. The sweater will shed a nice pile of lint during this process and you will want to keep it out of your washing machine pump.
If you really want the sweater to take a beating, a tennis ball or an old pair of jeans will help the wool full nicely by increasing agitation to the fibers. I personally have never bothered with this and have not had to put very many sweaters through a second cycle.
You may let your sweater run through the entire cycle or, if you have a top load washing machine, you may decide to check the wool at some point during the wash cycle. You have more control over the outcome this way. For example, if the wool is felting tighter than you would like you could set the knob forward and skip some of the wash cycle. If, on the other hand, the weave still looks too loose for your needs, you could reset the wash cycle and allow more agitation.
Once you are satisfied with the wool you may choose to lay it flat to dry or tumble dry on low heat in your clothes dryer. Keep in mind that the heat from the dryer will continue to felt the wool slightly while drying.
I almost always use the entire wash cycle then dry the sweater in the clothes dryer; I like the fluffiness that the clothes dryer imparts.
Before and after