The Japanese have many rules when it comes to bathing. No more so than in an onsen or public hot spring. Here are some tips to follow to ensure you don't come off as a silly gaijin and clear out the place with your major faux pas.
1. Probably the number one rule to remember is—wash BEFORE you head into the water. Little shower stations will either line the bath or be located off to the side of the bath area. Soap, shampoo, and conditioner are usually provided. You can bring your own personal toiletries in with you—simply leave them by the door when you head into the water.
You must completely wash yourself before ever entering the hot spring. Wash your whole body, hair, everything. Most shower areas have a stool for you to sit on while you wash—some have disinfectant to spray on the stool before you sit. You will usually find a plastic bucket as well to pour water over yourself (necessary if there is no shower head). Rinse both of these off and hose down your station when done.
2. Probably the second biggest rule to remember is that no swimsuits are allowed. You need to cast your modesty aside and accept you are going to be naked in public just like everyone else. When in Rome....
3. The first place you enter will be the changing room (remember that red is always for women). You will have already removed your shoes way back at the entrance to the public bath or hotel. Baskets are provided for placing all of your clothes and other belongings. Some onsen feature lockers for any valuables you may have brought in with you.
4. In your room at the ryokan or when you check in to a public onsen, you will be given a big towel and a small modesty towel. The big towel remains in the changing room. You bring the small modesty towel with you into the shower area and use it to scrub yourself down. When you go into the hot spring, NEVER EVER place the modesty towel in the water. Most people place it on top of their head while soaking.
5. After leaving the hot spring, you can rinse down again at the shower station. Be sure to wipe off excess water and sweat as best as possible with your modesty towel prior to re-entering the changing room.
6. Some onsen feature a mixed pool outdoors with separate entrances from the respective changing rooms. Sometimes you can wade into chest deep water before entering the main pool, while others let you bring the big towel outside and use it to cover yourself while soaking. It's best to watch what others do first in this situation as the rules most likely will not be in English.
7. Whatever you do, do not swim, splash, cannon ball, or dive in the water.
8. No photographs allowed for obvious reasons.