We used a tie-dye kit. I bought it from amazon. You can also get it at craft stores. I like this kit because it is not expensive, you can make a lot of shirts, you don't need to boil water, the colors are nice and bright. I've tried using rit dye, and it's not as good. I also like this kit because it comes with squirt bottles, which i like better than dipping into buckets.
You also need shirts. I got two five packs, one boy's, one men's. You can use old shirts, or get new ones. 100% cotton works best. We also dyed 2 pairs of socks and a pair of undies.
You also will need:
zip lock bags
and some patience.
Our kit came with a DVD on how to tie-dye. I put this on for the kids while i gathered the supplies. They had fun watching the dvd to get ideas.