Decide who to target. Do you want to have a rock jam or an acoustic bluegrass session? Will you invite non-musician listeners, or will the event be for musicians only?
Prepare your area. You will need space, and the amount will depend on the crowd that you expect. Some jam sessions are limited to a few people, whereas others can include dozens. Make sure that you have adequate seating and restroom facilities. Will you need methods of amplification, or will the session be acoustic? If a number of guests are bringing electric instruments, you probably will need amplifiers and possibly speakers, mixers and microphones.
Advertise the event. If you are only inviting a few friends, this can be as simple as making phone calls. If you want a larger crowd, consider advertising at a local music store, online or in the newspaper.
Offer incentives to draw your crowd. Invite everyone to bring a potluck dish, or if your group is small, provide snacks and drinks.
Advertise a consistent schedule if you want the jam to be ongoing. Decide on a specific day and time when the jam will be regularly held. This lets people make plans to be there.