In many ways, the story of Navajo rugs is intertwined with the story of Native American blankets. Weaving among Native Americans first began with the Pueblo people more than 1,000 years ago. Between approximately 1050 and 1300, they produced a wide array of blankets using vertical looms. Cotton was the material of choice, but in the 1500s, the Spanish brought churro sheep to America and forced the Puebloans to weave with wool.

After a Pueblo uprising drove the Spaniards out around 1680, the Spaniards returned in greater numbers in 1692. Their brutality prompted many Pueblo people to take refuge with the Navajo. Thanks to this mingling of cultures, the Navajo learned wool weaving from the Pueblo people. Navajo textiles soon become respected and well known for their quality and artistry.

By the late 19th century, the preferences of white tourists dictated what Native American weavers produced. For example, weavers noticed that many Navajo blanket owners were simply putting their blankets on the floor and using them as rugs. With this in mind, Navajo weavers began making rugs in addition to blankets, using a heavier type of weaving and abandoning stripes for borders. Abstract designs gave way to pictorials like cowboys and horses.

Similarly, blanket customers began using their purchases for decoration rather than on bedding, so many weavers switched from homespun fiber to inferior but cheaper prefabricated yarn. With the adoption of Germantown fibers and aniline dyes, the palette of available colors exploded, and Navajo blankets suddenly became extremely multi-colored.

Even as Native Americans were evolving what they produced to better appeal to the tourist trade, less-expensive manufactured fabrics were pushing their products aside. But in the 1920s, Navajo weaving enjoyed a renewed level of attention that continues to this day.

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