Recycled wool, also known as rag wool or shoddy is any woollen textile or yarn made by shredding existing fabric and re-spinning the resulting fibres. Textile recycling is an important mechanism for reducing the need for raw wool in manufacturing.

Shoddy was invented by Benjamin Law of Batley in 1813.^[1][2] It was the dominant industry of Batley and neighbouring towns in the West Riding of Yorkshire, known as the Heavy Woollen District, throughout the 19th and early 20th centuries.^[3][4][5][6] Following its decline in the United Kingdom, the centre of the shoddy trade shifted to the city of Panipat in India.^[7][8] Efforts have been made to revive the British recycled wool industry in the 21st century.^[9]

Historically, recycled wool products were called rag wool. Manufacturers distinguished between three main categories of rag wool:^[3]

• Shoddy – made from loosely woven or "soft" textiles that could be pulled apart relatively easily;
• Mungo – made from "hard" fabrics such as felts, that were harder to disintegrate but resulted in a finer product;
• Extract – made from the wool portion of cotton/wool blended fabrics.

In practice, few outside the industry were aware of these distinctions, even when rag wool was widely used.^[3][10] The common name was shoddy, which became a generalised term for poor quality goods.^[3] It is still used as a technical term for recycled wool within the industry.

Regulators in the United States make a distinction between reprocessed wool, which is made from manufactured wool products that were never used by the consumer, and reused wool, which the consumer has used.^[11] Other bodies refer to these as pre-consumer and post-consumer waste material.^[12]

The terms virgin wool and new wool are used to distinguish newly-produced, never-used wool from shoddy.^[2]: 13