Insert a vapor barrier sheet between the wall studs and tack it into place. This will help prevent moisture build-up between the walls and the insulation.
Insulate the spaces between the wall studs with bat insulation. Choose a grade that is appropriate for your region. Fit the insulation between the studs and nail it into place.
Measure the height and width of the walls. Write down your measurements.
Cut the wall board to fit with a circular or rotary saw. Wall board is typically sold in 4- by 8-foot lengths. Use your measurements to decide how many whole panels you will need, and what cuts you will need to make to finish off the rest of the wall. For example, if the wall is 9 by 12 feet, you will need four panels of wall board for the job -- three whole, and one cut to fit the remaining area.
Hammer the wall board into the studs with a hammer and paneling nails. Work from the bottom up. Hold the panel up against the wall. Check the bottom to see if it is level with the baseboard or floor. Insert a nail into the stud at a rate of one nail per every 12 inches vertically.