Alpaca fiber is warmer than sheep's wool and lighter in weight. It is soft and luxurious and lacks the "prickle" factor. However, as with all fleece producing animals, quality varies from animal to animal, and some alpaca produce fiber which is less than ideal. Fiber and conformation are the two most important factors in determining an alpaca's value. Animals from the Peruvian Accoyo line often have the best fiber characteristics. The Accoyo region of Peru practiced "line breeding" (breeding granddaughters to their grandfathers and so forth, much like dog breeders do,) and they managed to create exceptional fiber. Most Accoyo animals (both Suri and Huacaya) are white, although with diversification, there are some darker Accoyo animals.

Alpaca have been bred in South America for thousands of years (vicuñas were first domesticated and bred into alpacas by the ancient Andean tribes of Peru, but also appeared in Chile and Bolivia,) but in recent years have been exported to other countries. In countries such as the USA, Australia and New Zealand breeders shear their animals annually, weigh the fleeces and test them for fineness. With the resulting knowledge they are able to breed heavier-fleeced animals with finer fibre. Fleece weights vary, with the top stud males reaching annual shear weights up to 6kg.

In physical structure, alpaca fiber is somewhat akin to (human?) hair, being very glossy, but its softness and fineness enable the spinner to produce satisfactory yarn with comparative ease. Alpaca fiber can even be spun into yarn with one's fingers.