Mosaic stitch is a small square stitch, and it is useful for backgrounds. Each square block consists of a group of three diagonal stitches worked over two horizontal and two vertical canvas threads.
Mosaic stitch is very similar to Hungarian stitch but it is worked on the diagonal, rather than vertically.
Method A: Work in horizontal rows. The first diagonal stitch is worked from bottom left to top right over one intersection of the canvas, and the second diagonal stitch is worked over two intersections.
The third diagonal stitch is worked over one intersection, and this completes a square block.
Work from right to left in the first row. Bring up the needle right next to the bottom left corner of the first block.
Work from left to right in the second row. This time, work diagonal stitches from top right to bottom left.
Method B: Work in diagonal rows. This is very similar to Hungarian stitch, but worked diagonally. The first diagonal stitch is worked from bottom left to top right over one intersection of the canvas, and the second over two intersections.
When one square block is completed, leave one canvas hole and work the next block.
Continue working the blocks until the required area is filled. Work the next diagonal row in the same manner.
Structure of stitch
Mary Thomas, Mary Thomas’s Dictionary of Embroidery Stitches (1934) , p.125–6
Jennifer Campbell, Ann-Marie Bakewell, Guide to Embroidery Stitches (2004) , p.180