Pearls are produced in two basic ways: the Natural way — without human intervention — and the cultured way — when they are farmed by people.
Natural pearls occur when some form of irritant — be it a piece of shell, bone, scale, or even a parasite — lodges itself into a pearl producing mollusk such as an oyster, mussel, or abalone. To protect itself from the foreign body, the mollusk forms a nucleus over the foreign element, and continues to coat it with layers of nacre over the next several years. The factors that determine the size, color and shape of the pearl have to do with the size and shape of the nucleus, and the region of the ocean in which the mollusk resides.
Today, almost any pearl that you’d encounter is a cultured pearl. Desirable natural pearls are extremely rare, and hence are quite prohibitively expensive. In fact, only one in approximately 10,000 oysters not in farms will ever produce a pearl, and of those, only a very small percentage would ever yield a gem that is the right shape, size and color of something desirable.