If you are planning to make a wooden knife, whether you intend the knife to be strictly decorative will have some impact on what kind of wood you need to use and how you will need to carve it. For any wooden knife that you intend to use, such as for clay work, you are going to need to use a medium hard to hard wood. For a decorative knife, you can use softer woods or harder woods to create your piece. Decorative pieces can be any size, but a 1 foot x 2 inches x 1 inch plank is a good place to start. For a clay tool or other usable knife, you should start with a piece of wood that is approximately 8 inches x 3/4 inch x 3/4 inch.
Once you have chosen the wood, you should sketch out a design for the knife. You don't have to stick to your design exactly, this should just be a loose plan for making your wooden knife. A usable knife doesn't need to be particularly ornate. It should be built for equal parts function and hand comfort. A knife being made for purely artistic reasons can be as ornate as you like.
In order to begin, you will need a set of wood carving tools. Try to avoid the cheapest sets. Not only will the unfinished wood be rough on your hands, but the tips tend to be wobbly, which can not only mess up your piece, but be dangerous to your fingers. Speaking of which, to help you avoid cutting yourself while making your knife, you may also want to invest in a pair of carving gloves, a vise and a non-slip mat. Rounding out the list of supplies are sandpaper in a range from coarse to fine, carbon transfer paper, and some sort of protective finish. The latter is not so important for a functional knife, but will extend the life of any decorative piece.
Lay the carbon paper over your plank of wood, with your sketch lying on top of that; trace your design onto the wood plank. Any marks that are left after carving will be removed by the sanding process. Clamp the wood and take the straight gouge or chisel and roughly carve out the basic shape. To open any holes, start by carving with the bent v-tool. The bent chisel is for curves. Continue refining your wooden knife. Once you have the shape and the design that you want, sand it smooth and apply the protective finish.