For most all dealers in genuine Oriental rugs, an "Oriental rug" is a piled or flatwoven fabric hand-knotted in one of the traditional weaving areas of the Middle or Far East. Genuine "Oriental rugs" come from Afghanistan, China, India, Iran, Nepal, Pakistan, Tibet, Turkey, some of the southern territories of the old Soviet Union (Azerbaijan), Balkan countries like Romania and Albania, and some North African countries like Morocco and Egypt.

Genuine Oriental rugs are not made in Belgium or anywhere else in Western Europe or in the United States (there are hand-woven rugs made by native Americans in the American Southwest, but these are called "Navajo rugs" or "American Indian rugs").

"Wilton"®, "Karistan"® and "Couristan"® rugs are rugs made by machine in Oriental rug designs; they are not "Oriental rugs". No genuine Oriental rugs are made of nylon or polypropylene.
 

Adding to the confusion is the appearance of several varieties of hand-made rugs that are not hand-knotted rugs. Easiest to mistake for hand-knotted rugs are the hand-tufted rugs from China and India. Hand-tufted rugs are made using a "gun": a hand-operated tool that punches strands of wool into a canvas stretched on a frame. The design of the rug is drawn on the canvas, and the worker fills in the pattern with the appropriate color wool. When the rug design is fully piled (and this can take as little as three or four days for a 9' x 12' carpet), the rug is removed from the frame and a scrim fabric is glued to the back of the rug. It is only the glue on the back of the rug that holds the wool pile in place--yarn is not knotted over warps as with a real Oriental rug. Because the tufting process does not produce the fringe that is normal to a hand-woven rug (where the fringe is the end of the warp strings that run from one end of the rug to the other), separate fringe (usually woven as a tape) is often glued or sewn to the ends of a tufted rug.
 

The tufted rug is handmade, but it is not an Oriental rug because it is not knotted. In deciding to make a tufted rug instead of a real Oriental rug, the maker has chosen the cheapest way of making a piled rug. The tufted rug will rarely wear as well as the hand-knotted rug because the wool is almost certainly of a cheaper grade, and because the inexpensive latex glue used becomes brittle and deteriorates over time. A hand-tufted rug has resale value only equivalent to a machine-made rug of the same size.
 

Tufted Chinese rugs appear in colors and patterns almost identical to hand-knotted, pastel Chinese rugs. Hand-tufted Chinese have fringe like hand-knotted Chinese, and from the front look nearly identical to hand-knotted Chinese. Whereas a 9' x 12' hand-knotted Chinese Oriental rug in "90 line" quality (a commonly available weave) might cost about $1,500, a 9' x 12' hand-tufted Chinese rug would cost no more than about $700. Tufted rugs from India come in a wide variety of qualities, colors, and patterns, including both floral and geometric Persian designs. From the face they can closely resemble low to medium quality hand-knotted rugs.