Pick the Lettering tool (T) and click on the canvas. A dialog opens where you type your text and set the font, size, letter spacing, and stitch type. New text starts at Arial Bold, 20 mm, satin, with a zigzag underlay.
Every font in the picker is curated: each glyph has been digitized by hand, so the stitches follow the letter's real stroke direction and turn with its curves, the way a person would digitize it. The list is grouped by style and holds only fonts that are finished, so anything you can pick is ready to sew. More are being curated.
Size is the cap height in millimetres, and it decides what will actually sew. A satin stroke needs to be at least about 1 mm wide to hold together, and letters get thinner faster than you expect as you scale down.
Satin gives the glossy raised look most lettering wants, and is the default. Tatami fills each stroke with staggered rows instead, which is the better pick for large letters, where a satin stitch would span too far. Runoutlines the letter with a single line, for text too small to fill.
Letter spacing adds a gap between letters on top of the font's own metrics. The default 1 mm suits most text. Script fonts get a little extra automatically, because faces like Lobster draw their swashes past the edge of each letter so neighbours would otherwise be stitched on top of one another.
New lettering uses a zigzag underlay. Satin sewn straight onto fabric sinks into it and lets the material show between the stitches; the underlay lays a stabilising pass inside the stroke first, so the top layer sits up cleanly. It costs roughly 10 to 15 percent more stitches. You can change or remove it per object in the Properties panel.
Select the text object and the Properties panel lets you change the words, font, size, spacing, stitch type, and underlay at any time; the stitches regenerate immediately. Lettering is generated from the font, so the Reshape tool cannot edit its nodes while it is still a text object. If you need to reshape a particular letter, right-click the text and choose Break apart: each letter becomes its own object at the same position, editable like any other shape. That is a one-way step, since the broken letters are no longer driven by the text you typed.