This paper reports the effects of bleaching of alpaca tops and dyeing of bleached alpaca tops/yarns on the quality of tops and yarns. A dark brown alpaca top was bleached with hydrogen peroxide. Two bleaching methods were tried for effectiveness of color removal. A portion of each bleached top was dyed after bleaching. Color parameters were examined for unbleached, bleached and bleached/dyed tops, these tops were then converted into yarns of different twist levels and counts using a worsted spinning system. Some of the bleached yarn from each bleaching method was dyed in a package dye vat to compare the difference of top dyeing versus yarn package dyeing on yarn quality. Fiber diameter, yarn strength, yarn evenness, yarn hairiness and fiber degradation were tested to examine the effects of bleaching and dyeing on these properties at top and yarn stages. A processing route for bleaching and dyeing alpaca fiber was recommended.