Remove the ceiling covering, if any. Often, basement ceilings are left with the ceiling joists -- the structural wood supports running underneath the upstairs floor -- exposed. Use a hammer and pry bar to remove wood paneling or carefully cut away drywall to expose the joists completely.
Measure the distance between floor joists to determine the width of the insulation product you need. Most floor joists are 16 inches wide, but may prove 24 inches apart in some instances. Select faced fiberglass insulation, in either rolls or precut batts, of the same width as the floor joist space.
Look for any dead air spaces or gaps around the perimeter of the ceiling such as the juncture of the wall plates with the ceiling. Squirt caulk into very small holes and use expanding foam insulation in larger areas. Alternatively, tear some fiberglass insulation into small wads and pack it into these holes.
Measure the length of the space between your floor joists. Unroll the fiberglass, if using rolled fiberglass, and lay with the faced side up on the floor. Mark the length needed on the paper backing and use a straight edge to make a cut line. Press down on the insulation and cut, using a utility knife -- although scissors will work in a pinch -- to length. Batts, which come in precut lengths, may also need cutting for smaller-sized areas at the end of the row.
Lift the insulation and insert it into the joist space, faced side down towards the basement. Push it in slightly as you insert it, then pull out slightly until the facing is flush with the bottom edge of the ceiling joists. This fluffs the insulation in the space provided; compressed fiberglass insulation has a lower R-value, which means it does not insulate as well.
Staple the facing, which extends like lips past the fiberglass portion of the insulation, to the underside of the ceiling joist; that is, the surface edge of the joist facing the basement. Attach, to the joists on either side, every 6 to 8 inches.
Butt the edges of batts, if used, tightly together to avoid breaks in the insulation coverage. Stuff additional insulation around pipes, ductwork and other obstacles with the exception of electrical boxes, light fixtures and chimney pipes. These produce extreme heat and pose a potential fire hazard if you pack insulation around them. Leave a gap of 2 or 3 inches surrounding them instead.
Continue hanging the insulation until you have covered the entire ceiling. Top the insulation with plastic sheeting, if desired. The paper backing on the insulation serves as a vapor barrier, so the sheeting is not strictly necessary. Staple the plastic to the joists and use unbroken lengths, overlapping any joints necessary a couple of feet. Tape the joints to complete.
Hang the ceiling covering. Choose between new finishing material or reuse the original surface, if applicable. Attach to the ceiling joists to secure.