PURPOSE: To enable multi-color embroidery with beautiful square and round holes by laterally movably constituting a retainer for vertically movably holding plural needle shafts attached to sewing needles at the lower end and partially equipping the needle shafts with cutting needles.

CONSTITUTION: In a multi-needle embroidery sewing machine, a retainer 12 vertically movably holding plural needle shafts 13 equipped with sewing needles 14 at the lower end is laterally movably constituted and the needle shafts 13 can be exchangeably positioned right above a needle falling place. Cloth to be sewed placed on a bed 1 is moved according to a fixed program, the needle shafts 13 are selectively guided to the position right above the needle falling place and vertically moved to embroider the cloth to be sewed with various kinds of threads. At least one of the needle shafts 13 is furnished with a cutting needle 23 instead of the sewing needle 14, the cloth to be sewed is provided with cuts in two directions to form square and round holes having the circumference sewed with embroidery yarn.