Locate the studs in the room, which can be done with an electronic stud-finder. Point the unit at the wall and mark where the studs are located with a pencil. This will work unless the walls are masonry.
Prep the site. Put down dropcloths and remove any furniture from the area. Tape the cloths into place to keep dirt from getting in between them and the flooring.
Cut the drywall panels to fit. Drywall typically comes in 4-by-8-foot panels. Determine how many panels you will need. For example, if the wall is 10 feet by 8 feet, you will need three panels. Cut the panels to fit with a utility knife. Score the front side, bend the panel backward to break it, and then cut through the paper with your utility knife.
Hang the drywall. You may need to have a friend help you, since drywall panels are heavy. Insert 2-inch drywall screws (if the walls are masonry, use masonry screws instead) into the studs with 12 vertical inches between screws. Tighten each screw until the screw head just dimples the surface of the drywall. The top of the screw head should still be visible and not sunk too far into the drywall.
Tape off the joint seams. Use drywall tape -- self-adhesive tape works best -- and tape off all the drywall joints. Press the tape on firmly.
Apply joint compound over the tape. Use a putty knife or a drywall knife, and apply a thin coat of joint compound over the entire piece of tape. Extend the edges out slightly. Scrape off any excess with the edge of the knife. Let the compound set for at least two hours.
Sand the compound down. You will need a smooth and level surface for your wall. Use a hand block sander with a fine grit, and go over all the joint compound to smooth it out. The wall is now ready to finish.