Fix a Compression Faucet Leak
Determine Which Handle is Leaking
If you don't already know which handle is leaking you can easily determine that by alternately turning off the hot and cold water valves underneath the sink. If the link stops then you know the leak is in the associated handle. If you do not have individual shut off valves you need to service both handle assemblies.
Remove the Trim Cap, Handle and Assembly
Before proceeding be certain the water to the faucet is shut off at the valve underneath the sink. Using a small knife or screwdriver, carefully pry of the trim cap off the top of the handle. With a screwdriver remove the screw that holds the handle to the stem and remove the handle by lifting it.
Next, unscrew the locknut that holds the stem assembly in place. You may need to turn the turn the spindle a quarter turn to get the locknut started. Once the locknut is removed you can slip the stem assembly out of the faucet body. If the stem assembly is difficult to remove you can use pliers to pull it out. To avoid damaging the assembly, wrap the end of the pliers with heavy tape.
Inspect the Assembly
If any of the threads are damaged or if any part of the assembly looks worn it should be replaced.
Replace the O-ring
Replacing the o-ring will stop leaks from around the handle. You can roll the o-ring from the stem assembly. If it is stuck in place use a screwdriver to get it free. Be careful not to cut the o-ring as you will need to use it to a match for its replacement.
Before installing the new o-ring, coat it with petroleum jelly and then roll it onto the assembly.
Replace the washer
Replacing the washer will stop leaks from the spout. Use a screwdriver to remove the screw the retaining screw holding the washer in place. Using a screwdriver or small knife, carefully pry the washer free and replace it with an identically sized washer. The flat side of the washer faces the assembly. Be certain to check the next step to see if the valve seat also needs to be replaced or repaired.
Replace a Worn Valve Seat
Stick your finger into the valve seat to see if it is rough. If so it will damage the washer. You will need to either replace or resurface the valve seat.
Using a hex wrench or a seat wrench, turn the valve seat counter clockwise to remove it. Be sure to replace the valve seat with an identically sized part. When installing the new valve seat apply plumbers putty to the threads.
A valve-seat cutter can also be used to resurface a worn seat. Fit the valve-seat cutter with the retaining nut and carefully screw the nut and cutter into the faucet body. Press down lightly on the valve-seat cutter and turn it clockwise for three turns. You can use a damp cloth to remove any metal shavings. Inspect the valve seat to make sure it is smooth. If not repeat the process. Be sure to follow any directions that come along with the valve-seat cutter you purchase or rent.
Test the faucet
When you have made all of the necessary repairs reassemble the faucet and test it for leaks. If any leaks remain you may need to replace the stem assembly or the entire faucet set.