Materials Needed
—Tiles
—Tile adhesive
—Grout
—Grout sealer

Recommended Tools:
—2x4 beater block
—Abrasive stone
—Bucket
—Caulking gun
—Chalk line
—Combination square
—Grout float
—Level
—Notched trowel
—Rags
—Rubber mallet
—Sealer
—Small paintbrush
—Sponge
—Tape measure
—Tile adhesive
—Tile cutter
—Tile nippers

Surface preparation
As with most DIY projects, preparation is the most important step.
You'll need to work on a flat, clean surface, If you're tiling over an existing floor, it should be 1 1/8" thick for support. To cover vinyl or linoleum, you'll probably want to install a proper underlayment. You may want to sand with a 40-grit sandpaper. If you're covering wood planking, cement backerboard will give the best underlayer. A cured concrete floor should be level and lean.

Plywood underlayment
If you need to apply a plywood underlayment, it must be at least 1 1/8" thick when combined with the subfloor. Leave a 1/2" wide gap along the wall to allow for expansion and contraction. Also leave a 1/8" wide gap between the plywood to allow for expansion and contraction. Try to stagger the joints of the plywood from those of the subfloor.
After plywood is installed, cover nailheads and fill the seams and cracks. In high moisture areas, apply an isolation membrane over a wood underlayment. This thin rubber-like material will protect tile from expansion and contraction caused by temperature and humidity changes.

Installing cement backerboard
Concrete backerboard is an ideal surface for applying tile. It's a thin layer of concrete with fiberglass mesh on both sides and is excellent for most rooms, especially high-moisture rooms like the bathroom.
Use the same type of adhesive you'd use to set tiles (probably a latex-modified adhesive). Use a chalk line to mark the sheet dimensions and place the backerboard joints so they're not perfectly lined up with the subfloor joints.
Make sure to leave a 1/4" gap between the backerboard and the wall. Also leave a 1/8" gap between the backerboard sheets.
After adhesion, fasten the backerboard with screws driven in at 8" increments. Fill the joints with adhesive, making sure to smooth. Embed fiberglass tape into the adhesive to cover the seams then cover with more adhesive.

Layout the tiles
For a professional looking installation, tiles should be laid out square to the walls. Unfortunately, most walls are not perfectly square.
Start by finding the center of the room by snapping two chalk lines that meet at 90º in the center. From that center point, mark off a grid made of 2 or 3 square foot sections or whatever is best for the size of your tiles. Make a grid based on these measurements over the entire floor. This will allow you to set your tiles one section at a time.
Start laying out tiles along one line from the center to the wall, working in an L shape. Make sure to use spacers to separate the tiles. Check your perimeter tiles and try to adjust the tiles so that the perimeters are equal.

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Setting the tiles
Using a square-notched trowel apply adhesive to the backerboard. Work one section at a time. Comb the adhesive by holding the trowel at a 70º angle marking teeth marks.
Lay the first tile and twist lightly to make sure it's firmly embedded. Test this first tile by popping it off. The back should be 70-80% covered. If it has parallel lines of adhesive, your adhesive ridges probably aren't deep enough.
Set the remaining tiles using spacers, which keeps the space between tiles equal.
Level the tiles by laying a 2X4 on top of the tiles and tap lightly with a rubber mallet.
Continue laying tiles within the grid pattern one square at a time until you reach the wall. Most likely, you'll need to cut the tiles that will fit against the wall.
It's very easy to measure the perimeter tiles to be cut. Place a loose tile directly over a set tile. And on top of that tile, place a second tile, butting it up against the wall, with a spacer tile.
Trace the tile and cut with a tile cutter.
If your adhesive extends to the wall, set the perimeter tiles in place. If not you'll need to "back butter" the tiles individually.
Do this by spreading adhesive on the back on each tile with a notched trowel. Set the tile as you set the others.

Cutting tiles for special shapes
Sometimes you may need to cut a curve or notch a corner of a piece of tile.
To cut a curve, mark the cutting line then cut away bits of tile with the tile nippers. Smooth the cut edge with an abrasive stone.
Mark your corner cut and cut the corner of the tile. A carbide-grit rod saw can be used for this, or a wet say or you can have this done professionally.

Grouting
After your tile adhesive has set (usually 24 hours) you can grout.
Grout is the material that fills in the spaces between the tiles. Sanded grout is used for joints wider than 1/16" and is usually used on floors. Non-sanded grout is used for joints less than 1/16".
Pour a quart to half gallon of grout onto tiles. Use a rubber grout float at a 30º angle and spread the grout, making sure to work it into the joints.
Wait for a few minutes while the grout sets the wipe the tiles with a damp sponge. Once the grout has hardened, you'll need to wipe off the haze. Buff with a dry cloth.

Applying Sealer
After 7-10 days, apply silicone sealer with a brush, making sure to only cover the grout.

Thanks to DIYOnline.com for this guide