Wool fabrics may shrink on being immersed in water or on being steamed, and three different types of shrinkage (in addition to felting shrinkage) can be distinguished. 1. A relaxation of strains introduced by previous finishing treatments. The relaxation takes place when the cloth is wetted or treated with wet steam. 2. A change in dimensions which takes place when the moisture content of a relaxed cloth in altered. This change is reversible and is dependent on cloth construction and on the degree on heat-setting given to the cloth. 3. A change in dimensions due to steam pressing. This change can be a relaxation shrinkage, but there is also a specific “press shrinkage” indirectly dependent on the reversible shrinkage. Usually, yarn in set cloth is stabilized in a curved form. The curvature of set fibres changes reversibly in inverse proportion to their fibre diameters following changes in moisture content. When the equilibrium form of the yarn in changed, the forces of interaction between the warp and weft yarns are changed, and this affects such mechanical properties of the cloth as shear stiffness, extensibility and crease-recovery. Changes brought about by setting cloth in water for various times at various temperatures and in the presence of reducing agents are discussed.