Clean the axe blade and handle with a rag dampened in water to remove all wood flecks, dirt and grime. Dry the axe with another rag.
Hold the head of the axe in one hand and the flat surface of the sharpening stone in the other. Draw the blade edge of the axe at an angle across the stone, moving in the direction opposite the blade. For example, if the blade edge points to the right, draw the axe across the sharpening stone to the left.
Turn the axe over to sharpen on the other side, again drawing the tool away from the sharpening stone in smooth strokes.
Place a few drops of machine oil on each side of the axe head and rub in the oil with a rag.
Slide the sheath over the axe head and snap the enclosure around the bottom edge of the axe head.
Store the hand axe in a dry location, either on a flat surface or hanging from a tool pegboard. Avoid leaning the axe against a wall where the handle could gradually warp or someone could trip on the tool, possibly causing injury.