I just started making plarn this summer. During our move I fell behind, so one of my Christmas break projects was to bring out all the plastic bags I had been saving and give them new life. I like to use a rotary cutter with rotary board, but scissors also work.
1) Lay a bag out flat and make it smooth.
2) Cut off the top and bottom.
3) Gather the scraps to recycle at your local store.
4) Your bag is now a big tube. Unfold the sides and smooth it out.
5) Cut the bag into strips that are approximately 1 inch wide. Make sure you cut from one of the sides, not from the top or bottom.
6) Join the strips together by knotting the loops. Be careful when you pull the loop tight. Sometimes the plastic tears.
7) Once you have a long chain made, you can wind it into a ball, but you don't have to. Plarn does not tangle like yarn does. In the chain below, I doubled the loops to make bulkier plarn.
8) Knit or crochet with it. I started a crochet chain.
You will have to contend with some static cling, but you can use that to your advantage. Because they cling to each other, you can stack several bags on top of each other and cut them all at once. It will be faster this way. Just keep a hand on top of the pile.
I now have a big pile of strips that need to be looped together. It might be a good movie-watching activity. I just wish my local stores would make their bags more colorful. I have some ideas for what I might make with mine and will post pictures when I have something finished. If you have made anything with plarn, tell me about it in the comments.