Cutting a large circular hole in a sheet of plywood is a fairly simple task so long as you have the right tools for the job. If you are a beginner to woodworking and have only previously cut straight lines, learning to cut a neat, clean circular hole will enable you to tackle a far greater variety of projects. The same basic method applies to cutting circular holes of all sizes. Although the work is quicker and easier with electric tools, you can also get the job done effectively with manual tools.
Clamp your piece of plywood firmly in place on your workbench. Use a pencil and pair of compasses to draw the outline of the circle you wish to cut out. Alternatively, you can trace around a circular template of the appropriate size. Make sure the circle is in the exact position and is the exact size that you require before continuing.
Attach a boring bit to your electric drill. Wearing safety goggles, drill a "starter" hole in the centre of the circle you drew on the plywood. The hole must be large enough to accommodate the blade of your jigsaw. A diameter of about half an inch is ideal.
Fit your jigsaw with a general purpose wood cutter blade, then position the blade inside the starter hole in the centre of the drawn circle. With the jigsaw motor off, position the jigsaw so that its base (the saw shoe) is pressed firmly down on the plywood surface and the blade is facing away from you.
Start the jigsaw motor, then slowly guide the blade from the central hole toward the pencil line marking the edge of the circle. When you have sawn up to a few inches inside the edge of the circle, angle the blade slightly to saw a curved line that gradually meets the edge of the circle at a shallow angle.
Continue sawing, but now follow the pencil line marking the outside of the circle. Work slowly and smoothly --- try not to stop and start too much --- until you have sawn along the entire circumference of the circle. Remove the inner circle of plywood.
Smooth the cut edges of the circle with sandpaper.
If you have never cut a hole in plywood before, try a practice version on a scrap piece of plywood before tackling your actual project. Make sure there is plenty of room around your workbench so that you can freely move around the piece of plywood.