Instructions
Speak to the church elder Calafalas to get the "Tempestuous Times" quest, which is part of the "Willow Creek" story arc. The werewolf will not appear until you have the "Tempestuous Times" quest.
Leave the church and turn right.
Cross the bridge, and then take the path to your immediate right.
Slay the werewolf. Return to Church Elder Calafalas.
Speak to Calafalas and he'll give you a new quest called "The Bone?" and reward you with experience for killing the werewolf.
Go back to where you killed the werewolf before and slay him five additional times, each time collecting werewolf fur.
Return to Calafalas for another experience reward for killing the werewolf.