Face the bevel down. Push or tap the back of the chisel to remove thin slices. Control the depth by raising and lowering the handle.
Start recesses or mortises by outlining the area with a sharp utility knife or by making a series of shallow chisel cuts perpendicular to the surface. Skip this step and you risk chipping wood outside the mortise. Then remove thin slices by tapping the chisel with a hammer, bevel side down as in Photo 1, to carve out the wood inside the perimeter.
Chiseling with the grain can sometimes have disastrous results. If the grain runs deeper into the wood, it'll direct the chisel too deep. Stop and chisel from the opposite direction if you feel this happening.
If the recess is open on one side, like a hinge mortise, flatten the bottom by paring off thin slices with the back, unbeveled side of the chisel held flat to the wood (Photo 2).
In general, when you’re shaving into a piece of wood, face the bevel down (Photo 1). When you’re flattening a cut and have access from the side, face the bevel up and hold the back of the chisel tight to the surface (Photos 2 and 5)
Chop out large Amounts of wood by slicing off small amounts with each cut. Strike the chisel with a hammer and chop down about 1/2 in. Then chisel from the end to remove the piece before continuing. Your chisel must be sharp for this cut.
Caution: Wear safety glasses.
Set the chisel alongside one cut edge and strike it sharply with a hammer to remove wood from notches. This isn't fine work; the cut will be hidden by another board.
Cut a groove, or dado, by first sawing along both edges to the desired depth. Then break out the wood in the middle with your chisel. Space the chisel cuts about 1/2 in. apart.
Chisel out dadoes and other more precise joints a little at a time with a series of shallow cuts rather than driving the chisel too deep (Photo 4). Use a hammer or mallet for rough work or press with the heel of your hand for lighter cutting chores or finer cuts.
Scrape glue joints or other imperfections from wood projects by holding the blade at a right angle to the wood with the back of the chisel facing you. To remove thin shavings, support the blade with your fingers and press down while you draw the chisel toward you.
Scraping requires a perfectly flat, sharp edge. The chisel tip should scrape cleanly without leaving scratch marks in the wood.
Old chisels with nicked or rounded tips will need to be reshaped. Use a belt sander or grinder to remove nicks and shape the chisel to a 25-degree angle. If you’re using a grinder, dip the chisel in water every two or three seconds to prevent the tip from overheating and turning blue. If this happens, the chisel won’t hold an edge for long.
Next, polish the back of the chisel by rubbing it back and forth over progressively finer wet/dry sandpaper, pressing the back perfectly flat to the paper. For all sharpening, a good progression of paper is 120, 220, 400 and 600 grit.
Finally, set the honing guide to hold the chisel at a 30-degree angle to create a “secondary bevel” and run through the grits, starting at 220. Lightly glue the wet/dry sandpaper with spray adhesive to a piece of 1/4-in. glass with smoothed edges. Roll the chisel back and forth over the sandpaper until a burr forms on the back of the blade. Turn the chisel over and stroke it flat on the sandpaper to remove the burr. Then move to a finer-grit paper and repeat the process.
Original article and pictures take http://www.familyhandyman.com/tools/woodworking-tools/how-to-use-a-wood-chisel/step-by-step site