I am really puzzled since you said "needles" - plural so I am assuming that you have tried several. I don't mean to talk down, but since you didn't give more information, I will begin with the basics.Are you using specifically Embroidery needles? An embroidery needle has a longer eye. The tauton website explains it well. see next comment.

from the Taunton Website: Fortunately, needle manufacturers have designed needles specifically for embroidery thread, some with specialized eyes that eliminate stripping or splitting the thread as it passes through them. Machine-embroidery needles by Schmetz or Madeira have slightly rounded points to avoid damage to rayon threads. Topstitching needles can also be used with most embroidery threads. And Sullivan's Metafil, Madeira's Metallic, and the Schmetz Metallica needles, for example, designed for metallic embroidery thread, have an elongated eye and a special shaft to reduce friction.

Hi, jrob, I have used Organ brand machine embroidery, Schmetz machine embroidery, and singer plain needles all with the same fraying problem. Just can't figure it out. These needles and the same threads work perfectly on my old Simplicity S3 machine. But are just giving me a fit on my Innovis 4000. I have even slowed down the speed trying to stop it. I haven't tried the elongated eye. I'll try that next.

Freida, have you had your machine looked at? If the needle shank is slightly misaligned, the thread would rub on the needle and cause it to fray. If your machine is still new, it should be completely under warranty and so not cost you anything for them to at least check it out. Be sure to explain the problem as thoroughly as possible to the repair people, even taking pictures of the fraying if necessary. That's what it took to get mine working right.

Thanks, Cutiepie, I just had it in for a cleaning. They may have it misaligned. I have hardly used it since I got it back. I think you just hit the hail on the head. Freida