Here's the entry from Step It Down: Games, Plays, Songs, and Stories from the Afro-American Heritage (Bessis Jones and Bess Lomax Hawes, 1972):

Bob-a-Needle
it's a game. Of course, it's a play, too, but it's a game, a house game. . . . Or either you can play it outdoors.
"Bob-a-Needle" (bobbin needle?) is, for purposes of this game, a pen, a jackknife, or a small stick of wood that can be passed rapidly from hand to hand. All the players but one stand in a tight circle, shoulder to shoulder, holding their hands behind their backs. The extra player stands in the center of the ring; she closes her eyes and holds the bob-a-needle high over her head in one hand. One of the ring players silently creeps up and takes the bob-a-needle from her hand and puts it behind his own back. The center player then opens her eyes and begins singing the lead line of the song; the players in the circle sing the refrain:

LEAD VOICE (AD LIB)
GROUP VOICE

Bob-a-needle,
Bob-a-needle is a-running,
Bob-a-needle,
Bob-a-needle is a-running,
Better run, bob-a-needle,
Bob-a-needle is a-running,
Better hustle, bob-a-needle,
Bob-a-needle is a-running,
I want bob-a-needle,
Bob-a-needle is a-running,
Want to find bob-a-needle,
Bob-a-needle is a-running,
Going to catch bob-a-needle,
Bob-a-needle is a-running,
Turn around, bob-a-needle,
Bob-a-needle is a-running,
Oh bob, bob-a-needle,
Bob-a-needle is a-running.

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Click to play

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The lead singer's lines are extemporaneous and can be sung in any order. Mrs. Jones often sang each one twice.
During the singing, the players in the ring pass the bob-a-needle from hand to hand, trying to move as little as possible in order not to make its location obvious. Bob-a-needle may travel clockwise or counterclockwise, and the players may reverse direction at will. The center player meanwhile reaches around the waist and feels the hands of each ring player in turn; she too may go in either direction. but she may not skip players nor run back and forth across the ring. When the center player reverses the direction of her search, she must signal this with the lead line, "Turn around, bob-a-needle!"
This game does not end when someone is caught holding the elusive bob-a-needle. Like most of Mrs. Jones's games that involve "losing," the person caught simply pays a forfeit and/or takes over the center role so that the play can begin again. When the players tire, the accumulated forfeits are redeemed by their owners in a new sequence of play.