Instructions
Gather three sticks and two strings for the fishing rod if you don't already have one. To get sticks, chop down trees and pick up the wood blocks. Go to your crafting table and process the wood into wood planks and then into sticks. To find the string, kill spiders that only appear at night.
Go to the crafting table and select "Fishing Rod" in the Tools category. The rod goes into your main inventory.
Press "Y" to open the inventory. Highlight the fishing rod and press "Y" to move it to your quick inventory.
Stand next to any type of water, such as a pool, lake or ocean. Press "LB" or "RB" to scroll to the fishing rod in your inventory.
Press "LT" to cast the line into the water. Wait for the bobber to splash and dip below the water's surface. When you see this, immediately press "LT" to yank the fish out of the water. You'll normally pick up the fish automatically. If it flies over your head, look behind you and walk over the fish to pick it up.