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In this video, This Old House tile contractor Joe Ferrante explains how to set ceramic tile in a subway pattern.

Steps:

1 Apply thin coat of tile mastic or thinset to cement backerboard with smooth edge of a notched trowel.
2 Use the notched edge of trowel to apply thicker bed of mastic to wall.
3 Start setting bullnose tile along edge of the wall.
4 Press each tile firmly into the mastic to create a strong, lasting bond.
5 Set the field tile alongside the bullnose, working your way across the wall.
6 Maintain consistent spacing between tiles; if necessary, place tile spacers between the tiles.
7 Allow mastic or thinset to cure before grouting the joints between the tile.