Hazelnuts have a hard, smooth shell that must be removed before consumption. Any kind of nutcracker will do. Before using hazelnuts for baking or cooking, you also have to remove the bitter skin. You can eat hazelnuts out of hand, raw or roasted and skinned.
Break the hazelnut shell using a nutcracker. The nut should come right out whole. Discard the broken shell, and make sure there are no small pieces stuck to the nut. Throw out any nuts that look shriveled or moldy.
To remove the bitter skins, place a single layer of hazelnuts on a baking sheet and bake for 15 to 25 minutes at 275 degrees Fahrenheit. Place the hot nuts on a dampened dish towel and fold it over. Allow them to sit for two minutes so the nuts steam in the towel.
While still warm, rub the nuts with the towel, releasing the skins. Rub until the skins have come off as much as possible--there will probably be a small amount of skin stuck on some, which is fine. The nuts are now ready to be chopped and used in recipes.
You can also release the hazelnut skin by blanching in boiling water with a tablespoon of baking soda for three to five minutes.