In order to improve the structure form and color texture characteristics of fancy yarn and provide strong support for the technological innovation of textile and apparel products the development of fancy yarn was reviewed the progress and shortcomings of fancy yarn processing technology in recent years were analyzed and summarized in this paper. The definition classification and configuration of fancy yarn were expanded from the perspective of the whole process of fancy yarn processing. The innovative elements of fancy yarns were analyzed from three aspects namely, composition principle processing technology and visual art, and the innovation mechanism and construction method of 9 kinds of fancy yarns were proposed* By means of non-uniform mixing, multi-channel asynchronous drafting and multi-axis asymmetric twisting in spinning process, the spinning process of fancy yarn and its innovative methods of shape, structurecolor and texture style were discussed.