Here is the how to straight from Martha's fantastic site and you can click here to see so many other great ideas, recipes and much more.
Ribbon Lanterns How-To
For each, you'll need 1 paper box lantern and 4 lengths of ribbon, each measuring 9 times the height of the lantern.
We used satin and grosgrain ribbons, 1 to 1 1/2 inches wide.
1. On one top corner of the lantern, measure 1/2 inch from top and 1/2 inch from side; mark with pencil.
2. Using a craft knife, make a horizontal cut at marked point, toward center, equal to ribbon's width. Make another cut, 3/4 inch down.
3. Repeat process to make pairs of cuts on all corners of lantern (except on top and bottom panels).
4. Starting at one bottom corner, thread ribbon through the 4 cuts on that side, loop ribbon over lantern, and thread other side, leaving an equal overhang on both sides.
5. Place another ribbon parallel to first; repeat threading.
6. Give lantern a quarter turn; thread remaining 2 ribbons, looping over first pair.
7. At each bottom corner, knot the 2 adjacent ribbons together, about 3 inches down. Gather all ribbons, and knot together, about 5 inches down from first knots.
8. Trim bottoms of ribbons at an angle. String hanging light through lantern, following manufacturer's instructions, or hang lantern as is.
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