Clean it up with a wire wheel on an angle grinder (wear a dust mask and safety glasses) or soak it over night in vinegar. I think the wire wheel gives a better look. Then fit it to a nice boy's axe handle but don't set the wedge yet. You can usually find nice boy's axe handles made by Link in your local Ace Hardware store. Then before final assemble file and hone the edge to your desired shape and sharpness. It helps to clamp it in a vise for filing.
Alternately you can hang it before sharpening and then clamp the haft down to your bench for filing and honing. It's a personal preference thing.
Read this:
An Axe to Grind
And watch this:
http://www.youtube.com/watch?v=Xz3rs-eaN3E