Lay out and install the field tile on the backsplash around the areas where the pencil tile will be installed.
Use a thin strip of wood the same width as the pencil tile for a place holder to ensure that the space being left is the correct size. Place the strip of wood in the area where the pencil tile will go, adjust the field tiles around it to account for grout size, then remove the wood place holder and move to the next section.
Allow the field tiles to dry in place for an hour to ensure they will not move. Use a margin trowel to spread a small amount of adhesive directly onto the backs of the pencil molding. Press each piece of pencil tile into the space left between or next to the field tiles.
Wait for all of the tiles on the backsplash to dry for 24 to 48 hours before grouting. The pencil tile is grouted the same way as the rest of the tile; use a rubber tile float and press the grout onto and between the tiles at a 45-degree angle. Wipe away the excess grout after 10 minutes with a damp sponge.