Cut the yarn into pieces that are about 1 inch; they can be longer or shorter, depending on preference. It is important that all the pieces are the same exact length.
Fold a piece of yarn in half over the latch hook. Hold the yarn firmly in place with your finger.
Insert the latch hook into one of the canvas squares as shown.
Pull the yarn up so that it falls between the hook and the latch.
Pull the hook down so that the latch closes. Make sure the yarn is caught between the latch and the hook
Pull the hook down and out of the canvas square. Pull the yarn tight to complete to secure the knot.
Repeat Steps 2-6, alternating yarn colors to make the design of your choice. When all the canvas squares are filled, your rug is finished. You can finish off the edges by using iron-on rug binding, following the instructions on the package.