Sharpen the pencil and insert it into the holder in the arm of the compass.
Line up the tip of the pencil with the sharp point or needle of the compass. Tighten the screw that holds the pencil in place. (See References 1, 4, 5)
Pull the needle and pencil apart until the distance between them is approximately equivalent to the radius of the circle (or the radius of curvature of the arc) you want to draw. Measure the separation between the needle and the pencil tip with a ruler if you want to draw a circle with a specific radius. (See References 4)
Push the needle into the paper while holding the hinge or knob at top of the compass. Push down on the knob, while rotating it between your fingertips so that the pencil tip sweeps across the surface of the paper. Rotating the knob through a full revolution will produce a complete circle. Partial rotations produce arcs or curved lines. (See References 1, 4, 5)