A method for producing insulation tape. A strip of fabric is provided and a layer of insulation powder material is deposited onto the fabric. The fabric is folded over the insulation powder to form insulation tape that may be wrapped around pipes. The method of folding the fabric includes first bending the fabric into a trough shape that has a bottom portion and lateral upstanding flaps that terminate in lateral edges. The insulation powder may be deposited onto the bottom portion of the trough. The insulation powder is packed onto the bottom portion. Tape with adhesive on both sides is placed on one of the flaps so that when the flaps are folded in overlapping contact over the insulation powder the powder is enclosed and the flaps remain secured to each other. Stitching may be added to further secure the adhered flaps to each other and to the bottom portion.