How should I tile the drywall around my fireplace?

Tasha, we used to have a very similar fireplace. It had a row of 10x10 tiles around the outside of the black flange and a double row in front for the hearth.

Sounds like a win! You have any pics you could share?

Surrounds & mantle Here's easy DIY Really nice one https://www.youtube.com/watch?v=Fqdf4qwnfPo Another https://www.youtube.com/watch?v=zffoGuVNOpM easy https://www.youtube.com/watch?v=xDakn_gJ8Yo More https://www.youtube.com/watch?v=K1-OZSHVNk0 More https://www.youtube.com/watch?v=q9QGQpU6clM One more https://www.youtube.com/watch?v=kMlm3SciI-s

I would tile the whole corner wall with a tan wood look tile. But don't put tile over the black border because that area can get hot and will radiate heat into the room. They make tiles (edge pieces) with rounded edges for edging around the metal. If they don't have the edge tiles, you can purchase a metal edge strip to cover the cut edges around the fireplace. Add a decorative strip of molding along the top to finish it. Stain the molding so it closely matches your floor. Take a picture of the space to the tile store and they will help you find everything you need. There are loads of new products out there!

If you tile the black area why not just paint the surrounding either in a contrasting color and make it an accent wall... well half wall. Or you could paint it with a cordinating color in the tiles. Depending on the color and type of tiles you use and your preference/style. another option would be to put in faux wood tiles on the background.

I wouldn't tile on sheetrock. I would tile on a piece of Hardy rock or plywood. This way the sheetrock underneath will stay usable for later use, just cover it up with what you choose before tiling. Just one opinion. Happy home improving!