I posted this tutorial almost 4 years ago to the day on my now defunct tutorial blog. I thought I'd add it here since it's still a great technique, and I actually need to make some more of these soon. The tutorial uses a vintage sheet and handkerchief, but of course you can substitute any fabric you may have on hand.

Supplies & Tools
Old/vintage cotton sheet and thread to match
Embroidered handkerchief or vintage doily or scarf and coloured thread to match design
Sewing machine with decorative stitches
Sewing scissors
Measuring tape
Pins
Iron
Pillow form - I used a 15"x15" one which is fairly standard
Instructions
Measure and cut a 16&1/2" square, and two 16&1/2" x 10" rectangles from the sheet
Center handkerchief on right side of the square piece and pin them together. This will be the front of the cover.

Using coloured thread and a decorative stitch, stitch kerchief to
fabric. Tip: practice the decorative stitch first on a scrap piece of
fabric to ensure that stitch lengths and tension are correct. I learned
this one the hard way!


Fold over 1/4" along long side of rectangle piece and press

Fold over again and press

Change thread colour and using a straight stitch, hem the edge, and overstitch on the right side.

Repeat with other rectangular piece. These two pieces will form the back of the cover with an opening to make it removable.
With right sides together pin one rectangular piece to the top part of front as shown, with hemmed edge towards middle.

Then pin other rectangular piece to bottom part, overlapping the top piece, with hemmed edge towards middle.

Stitch all four sides together with a 1/4" seam. Remove pins, tie off and cut threads and turn to right side.
Front

Back

Leave cover on right side and over stitch 1/4" from edge

Close-up

Insert pillow form and toss on couch!

This project should take you less than an hour if you have some sewing experience. Please let me know if
you have any questions! I am by no means a professional seamstress and I
made this up as I went along, so my instructions might only make sense
to me!
This really brings back memories! I did this just before Kieran was born: four years and three homes ago! Time flies doesn't it?