1.  Login to SharePoint with a user who has full control.

2.  On the left hand Menu select the Document Library you wish to make the change in. (ex. Shared Documents)

3.  Select the folder or File that you want to change permissions on and open the dropdown menu to the right of the folder name. (ex. Test)

4.  From the drop down box select Manage Permissions.

5.  Remove any users you do not want to have access to the folder.

        a.  Click the checkbox to the left of the user /users and select Remove User Permissions  from  the Actions menu.

6.  To edit permissions for a user. Click the checkbox to the left of the user /users and select Edit User Permissions from the Actions menu.

7.  Now select what level of permissions the user will have and click ok.

You have completed a folder level permissions change.