If you are making a rug that will be walked on, wool yarn will last longer than other yarns. If you are making other home decor, you can use almost anything that will fit through your tool. The thickness of the yarn China rug mat yarn (embroidery floss, worsted weight, sock weight, bulky, etc.) is determined by your punch tool. If it has a small eye, then the finer threads and yarns would be used. The opposite is also true, if the eye is large, then you would use heavier weight yarn or even wool strips. It just needs to flow smoothly through your tool.

I have currently used both the embroidery floss and bulky yarn and sizes in between.