Decide what type of input you want to use. With Audacity and other audio-editing programs, you have the option of recording your own sounds or using existing digital audio files. If you select the former, then use a microphone and an audio interface to record audio into the computer (unless your computer has a built-in microphone). If you choose the latter, then your audio-editing software will allow you to drag audio files into the program and work with them there.
Create a click track. From the "Generate" drop-down menu, choose "Click Track...," and then set the tempo parameters to your liking in the resulting dialog box. Click "OK" and the program will produce a metronomically perfect track containing a clicking sound that will help you to record in perfect time. You'll record into a separate track, and, therefore, it's important to use headphones while recording so that the sound of the click track isn't picked up by the microphone.
Create an audio track. From the "Tracks" drop-down menu at the top of the screen, choose "Add New" and then "Audio Track." The track will be represented visually by an empty horizontal bar in the Audacity window. When audio is introduced into the track, you will see wavelike formations in that area. You also have the option of creating a "Stereo Track," which contains separate information for the right and left channels. This option may be necessary if you pull in pre-existing audio files that are already in stereo.
Prepare to record. Do this by adjusting the microphone's Input Level Slider (look for the microphone icon in the top-right quarter of the Audacity window), but first test the input level by pressing record (the button with the red circle) and playing or singing into the microphone at the highest volume at which you expect to play or sing when making your final recording. While recording, keep an eye on the Input Level Meter (the red graph at the top of the Audacity window, in the middle). The input level should approach the right side of the graph without touching the little white bar at the end. If your input level is too high, then the signal will distort. If this happens, you'll notice a little red mark that remains on the right end of the Input Level Meter. Adjust the Input Level Slider until the loudest part of your recording is close to the right end of the meter without touching the bar.
Record your first track. If you plan to layer a few instruments or voices together, then it's best to record them each individually into separate tracks. This way, you'll be able to manipulate the volume of each instrument---or even edit and make changes to each instrument recording---without affecting the other instruments.
Record new tracks. Use the same procedure as earlier to create an audio track, to prepare to record and to record. You can control the volume of each track using the sliders located in the left-hand part of the track row.
Select the portion of audio that you want to use as your loop. Click and drag your cursor from left to right to include the time span of your loop and, while holding down your mouse button, drag from top to bottom to select the tracks with audio you want to include. The tick marks within your click track act as a visual aid, increasing your precision when selecting a span of time. Loops are typically made of full measures. So select a portion of audio made of an exact number of measures. Because the default settings of the click track are set to a time signature of 4/4, export a multiple of four beats.
Open the "File" drop-down menu and choose "Export Selection...." You'll be given the option of where to save your loop and also the type of audio file you'd like to save.
Employ the loop you've created. Use an audio-editing program to repeat the loop while layering other instruments or vocals on top of it.