Decide what sort of universe your hero abides in. This will help you to characterize him properly. For example, if he lives in a superhero universe, he will have great powers and probably have fighting against evil as one of his central passions. If he is in a psychological realism universe, by contrast, he will have ordinary virtues, shortcomings and struggles.
Decide what your hero looks like. This is rarely the most important step, but is a good place to start because it helps you to visualize him. Write down basic characteristics like his hair color and style, height, build, clothing and posture. Write down anything that distinguishes him from other characters and makes him unique.
Decide on your hero's central conflict. Is he trying to get the girl, save the day, deal with his complicated past, outsmart an adversary or some combination of the above? Try to be as specific as possible.
Decide what abilities or traits your hero uses to accomplish his goal. Is he resourceful or physically powerful? Does he have special technical knowledge or street smarts? Is he extremely determined to get the job done?
Decide on what character flows your hero has. It may be tempting to make your hero a paragon of every virtue, but heroes without flaws ring false. Your hero might begin as a coward, or be emotionally volatile. He may be unable to face his problems, or unsure if he even wants to.
Decide on how your hero changes. As he faces his primary challenge, the hero should mature. Usually, a hero will overcome a major flaw in his quest to achieve his goal.