The specification discloses an automated apparatus and method for packaging surgical needles having sutures attached thereto wherein a bundle of needles and sutures are placed at a semi-automated separation station and an operator feeds the needles, one at a time, into a rotating needle feed wheel. As the feed wheel advances, the suture is tensioned and directed along a pre-determined path to separate it from the remaining sutures in the bundle. The apparatus has a plurality of individually rotatable tool nests which are sequentially spaced on a rotating or indexing turntable. These tool nests sequentially receive plastic packages for receiving the needle and suture at a first station. At a second station, a needle is inserted into the package by robotic fingers which have retrieved the needle and attached suture from the rotating needle feed wheel. The rotating needle feed wheel and the rotating tool nests are synchronized to step together as each advances. At a third station, the package and needle are rotated to tension the suture and position the package and the suture for automatic winding of the suture into the package. At a fourth station, the rotatable tool nest is rapidly rotated to wind the suture into a circumferential channel in the package which surrounds the needle.