Making felt letters is not quite as simple as it sounds. The challenge is making letters that are consistent in size and look -- unless, of course, you want an eclectic mix of letter styles, but even then there's more to it than cutting out letters freehand. Use your computer to help shape the letters, and you'll have lots of perfectly-shaped felt letters for crafts, feltboard or home decor.
Enlarge your favorite font to the size desired on your computer screen. Open a basic paint program and select "text." Type the desired letter on the screen, then enlarge it to the maximum size. To further increase the size, zoom in on the letter. The letter should be black on a solid white background. Basic, blocky fonts such as Arial Black and Impact work well, and come installed on most computers.
Place a sheet of felt against the screen. You should be able to see the letter through the felt. Trace around the letter with a soft pencil. Repeat as necessary.
Cut out the letters along the lines with sharp scissors.
Stack two identical letters to make a soft 3-D letter. Hand sew around the edges with a needle and thread, leaving about 2 inches open. Stuff the letter lightly with cotton batting, and sew the opening shut.
You can also trace alphabet cookie cutters to make felt letters. Use stiff felt to make letters for a feltboard.
Don't use marker or pen to trace the letters, as it will stain the felt.