Step 1: Gather Materials
Your inset supplies: you could use any lace or decorative fabric. For knitting my pattern you'll need:
less than one skein any medium weight yarn (I used two strands together for decorative effect; you could easily use just one)
knitting needles size 8 and 10 (I used circular because they were on hand-you can use reg needles) (you can also use just one size needle- as explained in pattern)
sewing machine and thread
Step 2: Measure & Fit Inset Panels
I just kind of eye-balled it and from there, wrote up my knitting pattern.
Now either cut from your second material (lace, eyelet, any interesting fabric) or follow knitting pattern to create insets.
*this stitch pattern was created from a shawl pattern originally featured on Knitty:
Step 3: Pin, Cut, Pin....& Sew!
I cut the shoulder seam out, however you may need to adjust, depending on the style of your shirt. Fold the cut edges under, for a cleaner appearance and pin the inset in place.
Now you can sew the insets into place.
and you're done!
Enjoy your fancy new shirt ;)