Lift off old exterior window trim and flashing with a hammer claw or small crowbar. Pull nails and chip old putty to access and loosen the window and remove the window from its old frame.
Clear away any debris and remove any damaged framing materials or insulation. If old window framing is sturdy, you can build off it it. If it is shaky or poorly constructed, remove it and build an entirely new window frame for the new smaller window. Determine the dimensions of the framing required for the new window by consulting the manufacturers specifications that came with your new window.
Cut the 2x4's into framing lengths with the circular saw. Nail together and place the rough frame in the opening, checking for level and plumb. If the surrounding material is wood, nail the new rough opening frame into place. If it is masonry, drive masonry screws with a drill to secure the rough frame to the surrounding structure. Spray expanding foam insulation into any crevices and push fiberglass insulation into any larger gaps.
Install any felt, house-wrap, window flashing or other waterproofing measures around the new opening. If your window manufacturer's installation specifications call for caulking, run a bead of caulking around the rough opening now.
Place the new window in the rough frame, checking for level and using wood shims to level as needed. Secure the window flange to the rough frame with nails placed according to the manufacturer's directions.
Add new exterior finish materials to blend with the existing exterior siding and finish with the new window trim pieces. On the interior, patch any dry wall or lath and plaster around the window, trim out the new window with a wood sill and stiles and complete the job with the finish material.
