Coconut fiber, or coir, is the natural fiber that comes from coconut husks. Although it's now used for making garden pots and containers, coir has been used for centuries to make rope and weave mats. As supplies of peat moss diminished due to over-harvesting, coir proved to be an excellent substitute for peat moss in gardening. You use coir in the same way as peat moss.
Arrange coconut fiber in a pot if you are sprouting seeds. Coconut fiber holds water well and works in much the same way as peat or vermiculite for sprouting seeds.
Add an inch of soil to a pot in which you need to put a soil-retaining growing medium that will drain well, yet retain adequate water. This is the role of coconut fiber.
Place your plant in the pot with the root ball as bare as possible.
Add a layer of coconut fiber around the roots. The amount will depend on the type of plant you are growing, but add it as you would peat moss.
Continue layering coconut fiber and soil in the pot until you have your desired percentage of coconut fiber. Press down on the soil so it permeates the open areas of the coconut fiber.
If using coconut fiber outside, make sure it is buried. Squirrels love to use coconut fiber to line their nests.