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Stone washing is a textile manufacturing process used to give a newly manufactured cloth garment a worn-in (or worn-out) appearance. Stone-washing also helps to increase the softness and flexibility of otherwise stiff and rigid fabrics such as canvas and denim.
The process uses large stones to roughen up the fabric being processed. The garments are placed in a large horizontal industrial clothes washer that is also filled with large stones. As the wash cylinder rotates, the cloth fibers are repeatedly pounded and beaten as the tumbling stones ride up the paddles inside the drum and fall back down onto the fabric.
A number of people and organizations have claimed to have invented stone-washing. According to Levi Strauss & Co., Donald Freeland, an employee of the Great Western Garment Company (later acquired by Levi's), invented "stone-washing" denim in the 1950s. Inventor Claude Blankiet has also been credited with having invented the technique in the 1970s. The jeans company Edwin claims to have invented the technique in the 1980s. It is commonly accepted that French stylists Marithé + François Girbaud are inventors of industrialization of stone washing ("Stonewash" technic).

Source: Wikipedia