First, you want to harden the steel by heating it evenly to a cherry red glow. Then, quench it to cool it quickly. Different steel alloys should be qenched in different manners, but are usually oil or water quenched. The blade at this point will be very hard and brittle. To temper it, heat it around 300 or 400 degrees farentheit, or until the steel takes on a light straw color. Note, this refers to a discoloration of the metal and NOT a glow. You can probably do this part by heating it in your oven. Once heated to this point, allow to cool slowly, like in a warm room.
Fully hardening and then tempering makes it much easier to control what's going on.
There is a technique to making the piece progressively harder as it reaches the blade edge, but doing so, from what I understand, is something that requires lots of skill and practise to pull off. A fine Samuri sword might be tempered in such a manner.
Another consideration is to avoid heat cycling the work too much as you form the blade. Doing so can prevent hardening from working. This includes heat build-up from grinding.