The loss of bulk in hand–knitting yarns as a result of package dyeing has been investigated. Simulated dyeing of packages, prepared with and without axial compression, has revealed a correlation between the bulk of the relaxed dyed yarns and the permanent longitudinal set imparted to the yarns. The strain in the yarn in the wet package, and hence the longitudinal set, is related to the hygral expansion of the yarn and the strain imposed on the yarn during winding of the package. The role of axial compression of the package in determining loss of bulk is also considered. Finally it is shown that by adding reagents to the dyebath that inhibit the setting reaction, the loss of bulk can be markedly decreased, provided also that the yarns are fully relaxed after being dyed.