A tufting machine, comprising: at least one needle bar having a series of needles mounted therealong; backing feed rolls feeding a backing material through a tufting zone of the tufting machine; at least one yarn feed mechanism for feeding a series of yarns to said needles; characterized by further comprising: a gauge part assembly mounted below said needles and comprising a series of modules mounted along a gauge bar and having a series of gauge parts received therein and able to reciprocate into engagement with said needles as said needles are reciprocated into the backing material to pick-up loops of yarns therefrom, said gauge parts further being extensible and retractable in a substantially vertical direction, normal to a direction of reciprocation toward and away from said needles, with respect to the needles and each including a body slidably mounted within its module, and an upper portion including an elongated throat projecting at an angle from said body and along which the loops of yarns are picked-up from said needles; and a series of actuators coupled to said gauge parts for selectively controlling extension and retraction of said gauge parts; and a control system including programming for controlling the actuation of said actuators to move selected ones of said gauge parts between a retracted no-sew position, whereby said gauge parts will not pick-up loops of yarns from said needles, and extended pick-up positions, whereby said throats of said gauge parts are located at selected elevations with respect to a penetration depth of said needles to pick-up loops of yarns from said needles, for forming tufts of yarns in the backing material at varying pile heights according to a pattern being formed, and wherein said control system further includes programming for controlling said yarn feed mechanism in coordination with said control of the actuation of said actuators. at least one needle bar having a series of needles mounted therealong; backing feed rolls feeding a backing material through a tufting zone of the tufting machine; at least one yarn feed mechanism for feeding a series of yarns to said needles; a gauge part assembly mounted below said needles and comprising a series of modules mounted along a gauge bar and having a series of gauge parts received therein and able to reciprocate into engagement with said needles as said needles are reciprocated into the backing material to pick-up loops of yarns therefrom, said gauge parts further being extensible and retractable in a substantially vertical direction, normal to a direction of reciprocation toward and away from said needles, with respect to the needles and each including a body slidably mounted within its module, and an upper portion including an elongated throat projecting at an angle from said body and along which the loops of yarns are picked-up from said needles; and a series of actuators coupled to said gauge parts for selectively controlling extension and retraction of said gauge parts; and a control system including programming for controlling the actuation of said actuators to move selected ones of said gauge parts between a retracted no-sew position, whereby said gauge parts will not pick-up loops of yarns from said needles, and extended pick-up positions, whereby said throats of said gauge parts are located at selected elevations with respect to a penetration depth of said needles to pick-up loops of yarns from said needles, for forming tufts of yarns in the backing material at varying pile heights according to a pattern being formed, and wherein said control system further includes programming for controlling said yarn feed mechanism in coordination with said control of the actuation of said actuators.