This learning material for Image Based Lighting (IBL) is written as applicable to Blender Version 2.79b. Image based lighting setup is done using cycles node, with render Engine set to Cycles. Download and keep an HDRI image ready for use as the background Image.
Now the steps are as follows:
1. Set up a basic scene with a Cube as the main object and a plane below it to serve as the ground. Add material and texture to both the Cube and Plane using cycles nodes.
2. Change the lamp to Sun and set strength to 3. Rotate it to direct its light ray on to the Cube.
3. Set the Camera and hit 0 (zero) key in Number pad to go to camera view. Adjust its position and direction to get desires view.
4. In the properties Panel in the right, select World settings. Go to surface panel and for Surface select Background.
5. Split the 3D window into three windows. Two at the top and the third one below. The top left window may be used to see the rendered view(Shift+Z), the top right window to see the 3d view and the window opened below may be used as a Node editor.
6. In the Node Editor window, select World for World setting.
7. Add three nodes - Environment texture, Background node and World Output node from left to right. Connect Color in Environment Node to Color in Background Node and from Background here to Surface in World Output Node. Now the background would turn to a pink Color in the Rendered view, which indicates that all your node setting are ready for IBL.
8. In the Environment Texture Node go to Open File option and open the HDRI image file. Now you will be able to see the image on the HDRI image file as the background in your scene. To see the rendered scene, hit Shift+Z in the top left window which we had opened for seeing the rended output.
9. If you want see the rendered image in full screen, first click inside the top left window and then press Shift + Space Bar. To go back to previous view hit Shift+Space bar key again. It toggles between the two view modes.
