Remove any light fixtures and outlet covers from the drywall that you will be working on.
Tape off the edges of the wall with painter's tape to protect areas that you don't want painted.
Lay a tarp on the floor.
Spread a 1/4-inch layer of drywall compound onto the wall with a trowel.
Press the flat edge of the trowel against the drywall compound, then pull it away to produce raised peaks. Lightly flatten these peaks to produce a stonelike texture.
Inscribe mortar lines into the wet drywall compound with a chopstick or similar tool if you want the wall to look like it is made of multiple stone blocks. Use a laser level to ensure that your lines are straight.
Allow the drywall compound to dry for 48 hours.
Paint grout-colored latex paint into the inscribed lines with a paintbrush.
Apply the base color for the stones with a paint roller. With a light touch the roller will pass over the inscribed lines without filling them.
Allow the base color to dry.
Lightly sponge on a color that is a few shades darker than the base coat using a natural sea sponge. This will begin to add additional color and texture to the wall. Apply this paint more heavily on some stones than others to create a natural variation.
Pat the wall with a wadded piece of cheesecloth to soften the sponge texture.
Allow the paint to dry before removing the tape and replacing the fixtures.