Measure the distance between the corners of the walls on the floor and ceiling. Cut and install 2-by-4 boards to wall along the ceiling and floor. Use a circular saw to make the cuts. Drill masonry screws through the boards and into the walls to attach them.
Measure the height from the floor to the ceiling between the top and bottom boards. Cut 2-by-4 length boards to fit the measurement.
Drill the boards into the corners of the walls with masonry screws. Also measure out every 16 inches along the wall and attach the same length boards. Use a level to keep them straight as you attach them.
Cut and staple insulation strips in between the wood studs. Insulation comes with tabs that allow them to be stapled to the wood studs.
Place drywall up to the wall studs and drill them into the wood with drywall screws. Drywall is hung horizontally along its length. Start at the top of the wall and work your way down. Cut drywall to fit so that it ends on studs.
Smear a thin layer of drywall mud along seams with a trowel and then place drywall tape on top of it. Press the tape into the mud lightly. Smear a second coat of mud over the tape. Let this dry overnight. Work in small areas so the mud doesn't dry out before you get the tape in place.
Apply a second coat of mud over the first in a wider space. Taper it out from the tape line so that it gets thinner. Allow this to dry.
Sand rough spots along the dried mud and dust off the walls. You can now finish the walls with paint or wall paper as you see fit.