Making leather is a time consuming, and long progress, it has multiple steps to refine it, and thankfully most are just putting leather in a barrel and waiting patiently. Leather is an extremely important item for progression, and quality of life, being required for items like the Backpack, and other important tools like Gyrodynes, Ships, and a lot of other things.

Obtain either a small, medium, or large hide from an appropriate animal. Some animal's hides will need to be scraped in your crafting interface with a knife to be usable, some don't. Once you have the raw hide you'll need a log, knife, mixing bowl, and multiple barrels ready, of Limewater, Sea Water, and Tannin. Limewater is made from bone meal and water in a barrel, while Tannin is made with certain logs and water in a barrel. The mixing bowl requires Treated Lumber, which means you will need to have set up a working Beehive to finish the final steps of Leatherworking.

1. Soak the Raw Hide in Limewater.
2. Scrape the Soaked Hide with a knife on a log.
3. Soak the Scraped Hide in Sea Water.
4. Soak the Prepared Hide in Tannin.
5. Mix the Tanned Hide with seed/olive oil in a mixing bowl.
6. Scrape the oiled hide with a knife on a log.
7. Use a pair of shears on a Sewing Table to produce Leather.

Getting stumped on the Mixing Bowl step is pretty common, so here I'll describe in more detail how to do this step. First you need to craft a Mixing Bowl, which requires Treated Lumber, and Glue, and you'll also need a Spoon. To get Seed/Olive Oil requires tree saplings or Olives, the easier choice is the tree saplings, so we'll go with that. Grab at least 5 tree saplings, and use a knife with them in the crafting interface, creating Seed Paste. Boil 5 Seed Paste in a Pot over a Campfire with water, to get Seed Oil. The last thing you'll need is the Tanned Hide.

1. Place the Mixing Bowl on the ground, and put the Spoon in it.
2. Use a bucket or other liquid carrying vessel, and put 1000mB of Seed Oil in the Mixing Bowl.
3. Put in your Tanned Leather, you need either 3 Small Tanned Hide, 2 Medium Tanned Hide, or 1 Large Tanned Hide.
4. Click the Mixing Bowl, which will start the mixing process, you only have to wait now.
5. Once its done, crouch right click the Oiled Leather to grab it out of the Mixing Bowl.

Holding a knife in your hand, right click each box to scrape off that part of the hide, once you've done each of the 16 parts, you'll be able to pick it up by breaking it. Scraping uses a lot of durability, and will use durability if you scrape an already scraped area as well. Breaking the hide before all parts are scrape will reset the scraping progress.