The Alpaca is one of two domesticated breeds of South American camel-like animals, derived from the wild guanaco. It resembles a sheep in appearance, but is larger in size, and has a long erect neck with a handsome head.

Alpacas are kept in large flocks which graze on the highland of the Andes of southern Peru, at an altitude of between 11400 and 16400 feet over sea-level, throughout the year. They are not used as beasts of burden like llamas, but are valued only for their fibre, of which Indian blankets and ponchos are made. The alpaca comes in more than 16 natural colours. In stature, the alpaca (Lama huanacos pacos) is considerably inferior to the llama, but has the same unpleasant habit of spitting when annoyed.

In the textile industry, "alpaca" is a term used in different ways. It is primarily, in the correct sense, a term applied to the wool, or rather hair, obtained from the Peruvian alpaca. It is, however, more broadly, but wrongfully, applied to a style of fabric originally made from alpaca fiber but now frequently made from a similar type of fiber, such as mohair, Icelandic sheep wool, or even some high-quality English wool. In the textile trade, strict distinctions are made between alpacas and the other types of animal fibers. However, as far as the general public or purchaser is concerned, little or no distinction is made.