BuddyPress.org

If you’re using standard WP, you can’t.

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If you’re using WPMU, login to the admin area, navigate to “Site Admin > Options” and under “Allow new registrations”, make sure “Enabled. Blogs and user accounts can be created.” is selected.

If you’ve done this, when you’re logged in, navigate to your blog directory (example.com/blogs) and click on the “Create a Blog” button.