NUMBER OF PLAYERS
Play in a group of at least 7 players. Smaller games can work, but Werewolf tends to play much better in larger groups. Choose an additional person to lead the game as the Narrator, then have them shuffle and give one face down card to each player. Everyone should look at their card, and keep their identity secret.
BALANCING ROLES
Aim to have 1 Werewolf per 3 non-Werewolves. Experiment with adding various roles into the game, but take care not to overcomplicate play with too many. With so many roles to choose from, the goal is not to try to include them all at once, but to use interesting combinations of characters so that every game is unique.
NIGHT AND DAY PHASES
The game alternates between night and day phases, beginning at night with all players closing their eyes. During the day, all players wake and the Narrator reveals who was killed. They exit the game and do not reveal their identity (alternate rule: the narrator reveals character roles upon death).
Then all the players form an angry mob and decide who to kill by debating and voting. You may wish to time this portion of the game in order to keep things moving slowly. You may also wish to make voting mandatory, as it can be hard to come to a decision if players abstain from voting. Once a player is executed, the player is removed from the game and whatever rules were decided on surrounding role reveal are applied here as well.
WINNING
The Village wins if all the Werewolves are dead, and the Werewolves win if their numbers are equal to the Villagers. (For example, 2/2 or 1/1) Other roles have different win conditions. For instance, the Renegade shares victory with the Werewolves, the Lovers win if they are the only players left alive, the Tanner wins if he dies, and the Pied Piper wins if she enchants everyone else.
SECRECY AND PLAY STYLE
Many rules have been developed for this game, along with various play styles. Some prefer to have a rule where nobody can outright claim who their role is, which means that the true Clairvoyant can only hint at what she knows, and a Werewolf can only imply that they're innocent. This style results in a game with more subtlety, and forces players to be cryptic and creative.
Alternatively, you can also play with the rule that anyone can make just about any claim. The Tanner can say he's a Werewolf, and three different players can insist that they're playing as the Little Girl. This style can result in a spirited game with a lot of bluffing and twists.