The invention concerns an improved tufting machine which comprises a tufting head translatable within said tufting machine in X- and Y-directions with respect to backing fabric by means of a movement system. The tufting head comprises a tufting mechanism having a cyclic mode of operation, a hollow needle mounted in the tufting mechanism that is moveable relative to a cooperating foot in a reciprocating manner to insert a tuft of yarn into backing fabric in each cycle, a yarn supply mechanism mounted in the tufting mechanism and operable to supply a length of yarn to the hollow needle in each cycle, a yarn cutter mounted in the tufting head that is selectively operable to cut the length of yarn in selected cycles to produce loop or cut pile, and a computer-operated motion control system.