Pick a day when you'll have a block of uninterrupted time. Get six big boxes (U-Haul medium boxes are great for this). Label them "Keep" "Donate" "Dump" "Fix" "Maybe" and, if you're the sentimental type, a box labeled "Archive".
A caveat--make sure you edit warm weather clothes in warm weather, and cold weather clothes when it's chilly out. You may feel differently about an item when it's in season, and less connected to it when it's not.
Keep
Start with jackets, suits, and separates. Keep your essentials, the clothes that make you feel good, the clothes that have worked for you over and over--as long as they're in good condition, still fit, and don't look dated.
Donate
If you're the same size and haven't worn something in a year or more (some recommend two years), plan to give it away--unless it's evening wear. An evening outfit or separates that look and feel great can be worn for years.
Dump
Throw out clothes that aren't fit to donate (c'mon, you know they're in there!) Keep a few things for dirty jobs like gardening, painting, and store them with your tools. Unless you keep your tools in the garage, because then you'll never wear them because you'll be afraid they're full of spiders or something.
Fix
Put anything that needs a hem, button, alteration, or cleaning into this box. Once everything else is organized, come back to this box and get to work. For things you can't fix yourself, go to the dry cleaner or tailor (every woman needs a good tailor--if you don't have one, ask your friends and acquaintances for recommendations). Make sure this box is empty by the end of the day, even if you've just put the things in your car to take to the designated repair person.
One more caveat--make sure you really want to keep the things you're fixing--or you're just wasting money.
Maybe
This box is for the shirt you got on sale but never wore because you don't have anything to go with it, or just never bothered to figure out what to wear with it, the pants that are a little too tight, etc. At the end of the day, seal this box and put it somewhere else, away from your closet. Anything you don't miss after four months should be given away.
Archive
If you're not wearing an item but want to save it, it shouldn't be in your closet. After all, this is a closet--not a diary. This box is your time capsule. Gather anything you want to save for sentimental reasons and put it in this box. Make sure these clothes are clean, and pack them away in archival quality boxes with layers of tissue paper and cedar blocks or chips. Store the box in a cool, dry place to protect your clothes.
Once you've completed these steps, look over your keepers again and see how they coordinate with one another. If one piece doesn't fit with anything else, donate it. (Shopping to find things to go with it will recreate the problem you just finished solving--your wardrobe should be a coherent, cohesive unit. It's great to have pieces that express different aspects of your personality, but they still should all fit!).
Now make a list of things you need, like a new shell for a favorite suit, or a new white shirt to replace the four with yellowing you just got rid of. Put the keepers back in your closet and revel in all your new space--and in being able to see your clothes. And enjoy getting dressed the next day; it'll be so much easier and faster...and now you get to go shopping.