Clear the entire basement of all items. Move furniture, sporting equipment and boxes to create a blank slate to work within.
Sweep the basement and mop the floor surface with a commercial or consumer floor cleaner. This step is crucial if any new floor covering will be applied. Remove any construction paint from the foundation flooring.
Frame in the bedroom with 2-by-4s and drywall, if desired. Cut holes in drywall for electrical outlets and telephone connections. Insulate the ceiling and walls according to construction needs.
Choose a lighting fixture or scheme for the space. Movable track lighting and recessed can lighting are popular choices. Lighting is an important issue in basements, as most have little or no natural light sources.
Apply two coats of paint to the drywall after putting on a primer coat. Let the paint dry at least overnight.
Put down any floor covering desired. Natural wood flooring is common, as are modular carpeting and throw rugs.
Begin moving furniture into the basement bedroom and into the desired locations.