A method for producing inflated dunnage on the site of use, comprising providing, in rolled form, a plurality of preformed plastic bags, each of the bags comprising two plastic sheets in facing relationship and sealed along three edges with one edge remaining open. Air is blown toward each of the open edges in sequence, causing each bag to inflate, and the fourth edge of each inflated bag is sealed, the bag being empty except for the air. At least one sealed inflated bag is separated from the roll and placed in a carton to serve as dunnage. In an alternate embodiment, the stock material is provided in a continuous tubular form, and an air inflation needle is used to puncture a surface of the tube for inflation purposes.