You can use your home country license or an international license for 3 months.  After that you will need a Thai license.  Some insurance companies require you to have a Thai license before they will cover you.  Also, a Thai driver's license can sometimes be used to avoid paying the higher Farang entry fees since it is often accepted as proof that you are not a tourist.

To get a license you must be at least 18 years old and you will need:

1. An original Affidavit of residence issued at your Embassy or consulate, not more than 30 days old.

2. A non-immigrant visa.  Holders of tourist visas do not qualify.

3. Your passport

4. A medical report from a doctor or hospital not more than 30 days old.  Just tell the doctor what you need and he/she will sign the simple form.

5. Your driver's license from your home country.  If you don't have one you will need to take the fairly simple written and road tests (for which you will need your own vehicle.

6. 2 photos size 1" X 1"

7. A license fee of baht 105 baht (car), or 55 baht (motorcycle)

You may need to take certain eye tests and possibly a reflex test.  As usual take 2 copies of all documents and copies of your passport pages with your picture and your visa – just in case.
 

The license is good for one year after which you will need to go through the same thing again to renew.

Now, are you sure you want to drive in Thailand?

Driving in Thailand - Comprehensive information on the Thai traffic laws, driving rules & regulations, license requirements and Thai road signs, etc

Some tips on driving in Thailand - Asks the question should you drive here.