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In this video, This Old House general contractor Tom Silva explains how to patch plaster.

Steps for patching plaster walls

1 Measure area of plaster wall that's loose or damaged and needs to be replaced.
2 Cut a drywall patch slightly larger than the damaged wall section.
3 Hold drywall patch against plaster wall, and mark its outline with utility knife.
4 Using a utility knife, score the plaster along the patch outline.
5 Pry off the loose plaster with a painter's tool; clean up the debris.
6 Set the drywall patch against the wall and secure it with 1 ¼-inch drywall screws.
7 Cover the seams around the patch with adhesive-backed nylon joint tape.
8 Apply a thin coat of joint compound to the taped seams and to screw heads.
9 Allow compound to dry, then sand lightly with 150-grit sandpaper.
10 Apply a second, slightly wider coat of joint compound to the seams.
11 Allow second coat of compound to dry; sand with 150-grit sandpaper.
12 Apply a third, even wider coat of joint compound to the seams.
13 Smooth dried compound with 320-grit sandpaper.
14 Finish the wall with a coat of primer and two paint topcoats.