It is unique in two aspects of farming and processing: the green tea plants used for matcha are shade-grown for up to 40 days before harvest and during this time, the plant Camellia sinensis produces more theanine and caffeine. This also slows down growth, stimulates an increase in chlorophyll levels, turns the leaves a darker shade of green, and causes the production of amino acids. Only the finest top leaves are handpicked once a year in spring. After harvesting, the leaves are laid out flat to dry and become known as tencha which will be deveined, destemmed, and stone-ground to the fine, bright green powder known as matcha.

Grinding the leaves is a slow process because the milling stones must not get too warm, otherwise the aroma of the tea gets altered. The highest grades of matcha have more intense sweetness and deeper flavour than the standard or coarser grades. Matcha used in ceremonies is referred to as "ceremonial grade", meaning that the powder is of a high enough quality to be used in the tea ceremony. Lower quality matcha is referred to as "culinary-grade".