To begin working in lace rib stitch, you need to cast on a multiple of 4 stitches plus 3 stitches. This stitch is made up of a 2 pattern row repeat.

To start row 1, purl the first 2 stitches.

Take your yarn over your right needle to the back of your work, this will form a new stitch.

Insert your right needle into the next 2 stitches on your left hand needle and slip them off, without knitting them.

Knit the next stitch.

Take your left hand needle, and insert the tip through both of those 2 stitches that you just slipped.

Pass it over the top of the stitch you just knitted. That just created a central decrease.

Next you will make a lace hole. Bring your yarn forward to the front of your work, between your two needles.

Then bring it to the back, and around to the front again through those 2 needles. This just created a new stitch (or a lace hole).

Purl your next stitch.

Repeat this sequence (steps 3-10) right across your row until you have 1 stitch left, purl the last stitch.

To start pattern row 2, knit the first 3 stitches of your row.

Purl your next stitch.

Knit the next 3 stitches.

Keep repeating the sequence of purling 1 stitch, and knitting 3 stitches until you reach the end of your row.

Keep repeating pattern rows 1 and 2 to create the lace rib stitch.