First, you create a Page (Write > Write Page) that you want as your home page.
Next, you have two options (under Options > Reading) for what goes on the home page: latest posts, or a Page of your choosing.
To set a Page, you select the 'A static page' radio button, then the Page you want under the 'Front page' drop-down list.
Optionally, you can (create and) select a Page that will function as your top level posts page. But this is not a requirement.
Finally, you click the Update Options button to make your changes.