Step 1: Start at the back wall (the wall opposite the faucet end of the tub). Using a level, draw a vertical line from the outside edge of the tub up as high as you want the tile on the wall. Check the tub for level: If one side is higher or lower by more than 1/8 inch, adjust the starter row of tiles.
Step 2: Temporarily place the starter row of tiles (start with an edge cap tile) along the top edge of the tub. The tile next to the corner wall will have to be cut to fit. Adjust the run slightly so that not less than half a tile will have to be cut. Remove the tile.
Step 3: Spread as much mastic along the wall of the tub as you'll be able to cover with tiles in a half hour. As you progress, spread more mastic as needed.
Step 4: Place the first row of tiles in position. Push each tile with a slight twisting motion to spread the mastic, but don't slide the tile around or the mastic will rise in the grout line. Leave a 1/8-inch gap between the tub and the first row of tiles. Plastic tile spacers are available at tile and hardware stores.
Step 5: Put the edge cap and first two tiles of the next row in place. Then put the edge cap and first tile of the third row in place. You now have the beginning of a stair-step pattern.
Step 6: Continue placing tiles in a stair-step pattern until all except the top row of cap tiles are in place. Finish by placing the row of cap tiles along the top of the tiled area, starting with an outside corner cap.
Step 7: Place the tiles on the long wall in the same stair-step fashion. Start by placing a row temporarily along the top of the tub to determine how much must be trimmed off the tile. Spread the mastic as you did for the first wall, and install a row of tiles along the edge of the tub. Then place the tiles of the next two rows to start a stair-step pattern. Fill in the rest of the wall, and finish the top with a row of cap tiles.
Step 8: The procedure for the faucet wall is the same as it is for the other two walls. Use a saber saw equipped with a carbide blade or use tile nippers to cut the openings for the spout, faucets, and shower arm. The openings don't have to be exact, because the chrome trim rings (escutcheons) will cover minor imperfections.
Step 9: Clean up any excess mastic and clean the tools. Allow the mastic at least 24 hours to dry thoroughly.
Now it's time to grout those tiles. Detailed instructions are in the next section.