Use a measuring tape to determine the dimensions of your garage, and then decide how much drywall you need. Drywall generally comes in 4-by-8-foot or 4-by-12-foot sheets.
Trim the drywall sheets to size for the ceiling by first measuring the desired length and making a pencil mark on the drywall. Score the drywall along the line with a utility knife and snap it along the scored edge. If your ceiling is wider than the length of your drywall sheets, cut the sheets down to approximately half the width of the ceiling, so the seam will run down the center.
Have someone hold the first sheet of drywall up against the open ceiling, aligning it with the corner of the ceiling. Drill drywall screws through the drywall into the joists above to secure the sheet of drywall in place. Use one screw every 12 inches or so and sink the screws just below the surface of the drywall, so the holes can be filled with joint compound.
Hang the rest of the sheets of drywall on the ceiling following the same procedure.
Cut your sheets of drywall for the walls of the garage.Run the drywall sheets horizontally. Cut the bottom pieces of drywall so they sit about a quarter-inch off the floor, to prevent moisture damage.
Install the first sheet of drywall horizontally just below the ceiling. The edge of the drywall should be flush with the ceiling. Secure the drywall in place by driving drywall screws every 12 inches through the drywall, into the wall studs.
Continue to install sheets of drywall, installing all of the sheets on one wall before moving on to the next. When installing a second row of drywall, be sure the top edge of the new row is flush with the bottom edge of the previous row.
Apply a layer of joint compound to the seam between two sheets of drywall using a putty knife and cover the joint compound with a strip of drywall tape that has been dipped in water. Hold the putty knife at the top of the tape at a slight downward angle and run it along the length of the tape, pressing it into joint compound. Scrape away the excess joint compound around the seam using your putty knife.
Repeat this process on all the seams and allow the first layer of joint compound to dry according to the manufacturer's instructions. Apply a second layer of joint compound over the taped seams, spreading it to a width of about 6 inches, smoothing it out as much as possible with your putty knife.
Allow the joint compound to dry then run a wet 10-inch putty knife down the length of the seam to smooth the surface. Apply another thin coat of joint compound to a width of about 8 inches and allow it to dry.
Dip your putty knife in water and run it down the length of the seam again in a single stroke then apply a final layer of joint compound to a width of about 10 inches. Allow the joint compound to dry completely.
Cut pieces of drywall tape to length for the corners of the walls and ceiling and fold them in half down the middle. Apply a thin layer of joint compound to either side of each corner, dip the tape in water then press the folded tape into the seam. Run a 4-inch putty knife down the length of the seam on either side of the corner to squeeze out the excess joint compound.
Apply a 3-inch-wide coat of joint compound over the drywall tape on either side of the corner and allow it to dry completely. Wet your 4-inch putty knife and draw it down the entire length of the seam to smooth it, then apply a second coat of joint compound about 2 inches from the corner. Allow the joint compound to dry then repeat this process, applying a final coat about 1 inch from the corner on each side.
Sand the surface of the dried joint compound with fine-grain sandpaper to remove any imperfections. Be sure to sand only the joint compound, not the surface of the drywall. Once you have sanded all of the seams, you are ready to prime and paint the walls.
Install a strip of baseboard trim around the border of the room along the floor to cover the quarter-inch gap below the bottom layer of drywall. Secure the baseboard trim to the wall by driving nails through the trim into the wall studs with a nail gun.