E-Textiles are fabrics that integrate electronic circuits and components. Makers use them to create interactive clothing, furniture, and toys. However, this requires significant manual labor and skills, and using technology-centric design tools. We introduce Sketch&Stitch, an interactive embroidery system to create e-textiles using a traditional crafting approach: Users draw their art and circuit directly on fabric using colored pens. The system takes a picture of the sketch, converts it to embroidery patterns, and sends them to an embroidery machine. Alternating between sketching and stitching, users build and test their design incrementally. Sketch&Stitch features Circuitry Stickers representing circuit boards, components, and custom stitch patterns for wire crossings to insulate, and various textile touch sensors such as pushbuttons, sliders, and 2D touchpads. Circuitry Stickers serve as placeholders during design. Using computer vision, they are recognized and replaced later in the appropriate embroidery phases. We close with technical considerations and application examples.