My good friend Shae stenciled this fantastic "Covered in Bees" t-shirt for me. She knew it would be too big and sent it with her crafty blessings to be reconstructed however I saw fit.
Resizing tees is the recon I do most often, making my shirts fit me better while still being long (and wide!) enough to go over my hips.
Use a favorite shirt that you already love the fit of and that has similar stretch to the fabric for your template.
This is a fairly easy recon and usually takes about 30 minutes from start to finish.
UPDATE! I now have a video version of the entire tutorial...
The shirt, before resizing
Resizing using a favorite shirt - cut about 1/2" away from the original shirt so you have seam allowance.
You'll have to do a little guestimating on the sleeves, but if you take it slow and careful, it'll work out fine.
Use my favorite recon technique and eyeball for the sleeve size, adjusting the sleeve under the body of the t-shirt until it's the length and shape you want. Pencil a line on the existing sleeve using the cut on the t-shirt, and then added about 1/2" for seam allowance.
Find the center on the sleeves, pin to the seam allowance on the shirt. Pin along the sleeve, being careful not to pull or tug the fabric. Stitch using a stretch stitch and 1/2" seam allowance.
After stitching the sleeves, fold shirt in half, right sides together, matching the bottom hem. Stitch a 1/2" seam under the sleeve and all the way down the side. Trim seam allowance, if you wish.
Because you leave the original hems for the sleeves and the shirt in place, the reconstruction is now complete!