South American ethnic groups traditionally use palm fiber, which provides materials for domestic, commercial, and ceremonial purposes. A literature review of 185 references was carried out in order to identify and understand the extent of palm fiber production and the sustainability of harvesting and use in South America. The reports recorded 111 palm species and 37 genera used for fiber in the region; the genera Attalea, Astrocaryum and Syagrus had the highest diversity of fiber-producing species. Mauritia flexuosa and Astrocaryum chambira were the species mostly reported and with the largest number of object types manufactured with their fibers. The geographical distribution of the species use nearly overlaps the natural distribution of palms in South America, reaching its highest diversity in northern Amazonia, where palms are used mostly by indigenous people and peasants. The techniques used for extraction, harvesting and processing are usually basic and minimal. Most species are represented by wild populations found on common lands, the little detailed information available suggests that when use is intensive it is mosly unsustainable, and those with a greater market demand usually become locally extinct. Market demand, ecosystem conservation, and management practices used to boost fiber production are the major variables determining the sustainability of fiber extraction.