How Do I Repair a Dipping Outdoor Faucet?

Given this photo, how do I repair a drip? It is a quite old faucet. Do I remove the round handle and packing nut directly underneath? Then what? Do I replace the step, or is there a washer under there? Thanks for any help. I am plumbing-challenged.
http://jcman.hostingisfree.com/faucet.jpg
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Yes, turn off water, losen the nut and open/unscrew round handle at same time. Should be a washer. Take removed valve to hardware store so you can get a new washer which fits properly.
That will fix it 95% of the time...
Sometimes there is a "rough surface" on the "seat" or the spot inside the faucet where the washer presses against. Feel it with your finger tip to be sure it is smooth. If rough, use a little sandpaper to smooth it. Then clean off with water (turn water on for a second). If there is a rough surface, it will damage the new washer and begin leaking again soon.
"Buck Turgidson" wrote in message

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Thanks. That should say "stem", not "step".

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Where is the drip from? If it come from the stem, then it could either be the stem washer or the faucet needs a little tightening. If it's not from the stem, then it's the valve gasket.
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water off, just replace the whole thing . Then every part will be new. If its dripping out of the hose connection you could just put a cap on it ( a cap for a hose bib)
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