Locate the studs in the wall where you intend to install your cabinet using a stud finder. Mark the position of the studs on the wall in pencil. Check the blueprints for your house to be sure no plumbing runs behind the wall between the studs you have chosen.
Draw a rectangular template for your cabinet on the wall in pencil. The vertical sides of the cabinet should be drawn just inside the edges of the wall studs and the measurement between the top and bottom of the template should be equal to the desired height of the cabinet. Use a meter stick to draw your lines so they are straight.
Use a drywall saw to cut through the drywall along the lines you just drew. Cut out the template and set the rectangular piece of drywall aside. You will build your cabinet frame directly into the space you just opened up within the wall.
Cut a sheet of wood paneling with a circular saw to the width and height of your cabinet to serve as the back panel. Place the panel upright inside the wall space and secure it in place by driving nails from a nail gun through the panel along all four edges.
Construct the top, bottom and side panels for your recessed cabinet frame by cutting them out of sheets of 1/2-inch plywood. Using the circular saw, cut two sheets of plywood to the width and depth of your cabinet for the top and bottom panels. For the side panels, cut two sheets of plywood to the depth of the cabinet and the height, minus 1 inch.
Slide the bottom panel into the wall space so it is flat against the bottom. Drive nails from the nail gun through the bottom panel into the back panel and wall studs to secure it in place. Place the top panel flat against the top of the wall space and nail it down in a similar fashion.
Install the side panels. Slide the side panels vertically into place between the top and bottom panels so they are flush with the wall studs. Attach the side panels by driving nails from the nail gun through the panels into the wall studs and into the top, bottom and back panels along the edges.
Mark the desired position for any shelves you want to install inside your cabinet along the side panels in pencil. Cut your shelves out of 1/2-inch plywood using the depth of the cabinet and the width measurement, minus 1 inch.
Sandwich the shelves horizontally between the side panels where you made the marks. Attach them by driving nails at a downward angle through the edges of each shelf into the side and back panels of the cabinet frame.
Cut a door for your cabinet out of 1/2-inch plywood using the width and height measurements of your cabinet. Install two metal hinges along one edge of the door, placing each one about an inch from the corner, and screw the other side of each hinge into the cabinet frame.
Paint or stain your recessed wall cabinet. You may choose to paint or stain the cabinet to match your existing bathroom decor scheme or turn it into a hidden cabinet by painting the door the same color as the wall.