1. Be kind to your audience.
They paid money to see you make crap up off the top of your head. They don't deserve to be insulted, laughed at, or scolded for it. Treat them like the paying-your-rent royalty they are. Your number one priority is to help them have a good time. If they volunteer to come on stage, this is even more important. It takes guts to get on stage. Make them feel safe. The audience wants to see them succeed.
2. Be kind to your performers.
For as long as the show is running, your audience is royalty and your fellow performers are comic geniuses. Jokes at their expense will hurt their confidence and increase fear, which will make the show worse for everyone, with the added detriment of making you look like a jerk. Laugh at everything the performers do. Compliment them. Be their best friend. Good shows are built on trust, and that includes you.
3. Speak loudly and slowly.
Yeah. Hard to elaborate on that.
4. KISS (Keep It Simple, Stupid)
Explain each game with the least amount of words possible. If you are going to stop the game later to change it in some way, wait till then to explain it. Long explanations are confusing and kill the momentum of the show. Your job is to keep that momentum going.
5. Take the suggestion the audience wants you to.
If you've ever hosted, you've had this happen. You've already taken a suggestion when someone in the audience yells out a hilarious one, which everyone laughs at and cheers for in hopes it will be picked. Take that suggestion. I don't care if you already have one or if it doesn't fit as well; it doesn't matter. Remember tip #1. Do what makes the audience happy. That being said…
6. Don't take suggestions you shouldn't.
You know what your troupe is comfortable with and what they are not. Don't take a suggestion that will put them in an awkward situation. The audience doesn't always know what will make them laugh the most. If you take a suggestion that makes your performers uncomfortable, it will make the scene less funny, which will be worse for your audience in the end than if you had just taken a different one.
7. Make taking suggestions easy on yourself.
Every host loves to ask for a suggestion and then try to listen for words and phrases picked out of a hundred people yelling at once. This is hard, and it's not necessary. Just ask for suggestions from specific sections of the audience, or call on specific people. Make it easy. Keep it simple.
8. Don't pick "that guy."
You know who I mean. The guy who came to the show with aspirations to get on stage before the night was through. The guy who's trying to perform his own show from his seat every time you ask for suggestions. Don't put that guy on stage. He's not funny. Trust me on this.
Memorize instructions for the games. Memorize your welcome speech. Memorize the order (but keep a sheet handy just in case). Practice them. Do your homework. Comedy is serious business.
10. Know when to call "scene."
This is the standard by which all improv hosts are measured: their ability to know when to call a scene. Here's how I do it. First, earlier is better. Better to call it too early than too late. Once the scene begins I wait until I feel the scene has almost run its course, and should be ending in 30 seconds or so. This is a gut thing. You'll start to feel it after watching hundreds of scenes in practice. When you feel that time has come, start listening for a button—a funny line to end the scene on. You don't need a belly laugh (although if you get it, that's great). A chuckle will do. I maintain that it's better to end early on a chuckle than late on a big laugh. When you get your button, call scene immediately. Don't let a second pass after it. Choosing a good button at the proper time will give the scene a satisfying resolve for the audience.