Pearls can be categorized as either freshwater pearls or saltwater pearls. They may be natural pearls or cultured pearls. As is evident from the name freshwater pearls are formed in freshwater mussels that live in fresh water bodies such as lakes, rivers, ponds. Most of the freshwater cultured pearls sold today come from China. In contrast to this, saltwater pearls grow in oysters that live in the ocean, usually in protected lagoons. Akoya, South Sea and Tahitian are the three main types of saltwater pearls. The basic process of formation of all real pearls is the same. Based on their manner of origin, their place of formation and the species of the mollusks in which they are formed, pearls are categorized as natural pearls, cultured pearls, freshwater pearls or saltwater pearls. All the factors such as the environment, size and species of the mollusk affect the shape, size and luster of the pearl.

Natural pearls as the name suggests are pearls that are formed naturally without any human interference. Natural pearls are created when by some chance in nature an irritant gets lodged in the tissue of a pearl bearing mollusk. As we know the shape of the pearl is influenced by the shape of the irritant, therefore finding a perfectly round natural pearl is extremely rare. This is the reason as to why the majority of pearls sold today are cultured pearls. In a natural pearl all the characteristics –shape, size, color and luster are controlled by nature. They are only to be discovered and harvested by man.

Cultured pearls are logically speaking identical to natural pearls. They differ from natural pearls only in the manner of their origin. In case of cultured pearls, the irritant does not enter the mollusk by chance but is deftly planted by the pearl farmer into a pearl bearing mollusk, thus causing the formation of the pearl. The rest of the process of the actual formation of the pearl is the same as a natural pearl. The irritant gradually gets coated with nacre released by the mollusk and a pearl of a desired shape is formed. In this case, by controlling the irritant, the pearl farmer can influence the shape, size, and color of the pearl created.

Freshwater pearls are pearls that are grown within mollusks found in freshwater bodies such as rivers or lakes. These are the most popular variety of pearls. The reason for this is that they are not very expensive, are genuine pearls and are extremely durable. Freshwater pearls can be either natural or cultured, although the majority on the market is cultured. On comparison with saltwater pearls we find that are marginally less in luster and perfect roundness.

Saltwater pearls are the pearls that are grown in saltwater seas and oceans. These pearls are typically more valuable than most other types of pearls because of their greater luster and beauty. Popular types of saltwater pearls include Akoya, Tahitian, and South Sea pearls. Here again saltwater pearls can be either natural or cultured, although nearly all of the market is cultured.

Imitation pearls. These are not genuine pearls at all. Sometimes referred to as faux pearls, these are man-made pearls. These pearls are manufactured from glass, plastics, ceramics, or other similar materials. Imitation pearls are not gems at all and are used in costume or designer jewelry. They are not precious by any standards.