An interactive system and method for creating and modifying embroidery designs is disclosed. The system provides a user with numerous functions for interactively creating and modifying embroidery designs, and generating the necessary stitch commands for recreating the embroidery design on an embroidery stitching machine. The system is preferably operative on an IBM PC. The system is menu-based, and may be used for modifying embroidery designs in either outline-format or stitch-format. Once a design has been entered, the user may utilize predetermined functions to quickly alter a design and visualize the resulting design. The system further provides a method for modifying embroidery designs in an outline format into bridge type lettering.