To configure PuTTY for key-based authentication, generate a public/private key pair and upload the public key to the server. First, use the PuTTYgen tool to generate a key pair and then the Pageant tool to manage the keys. After that, you can upload the public key to the server by copying it to its authorized_keys file. Finally, configure PuTTY to use the private key for authentication by selecting the private key file in the “SSH/Auth” settings.