The old tile has concrete behind it. The areas you want to put the new tile are plaster. You can't just install tile on the plaster as you will either need to float the areas for tile or install hardibacker. The biggest challenge will be making the old tile and new tile look good where they come together.

Thank you for your replies. I could look into the beadboard. I wonder what it would look like if i just added a 4" inch boarder of tile above it? I need some kind of backsplash for the pedestal sink. (?) I wanted a tiled wall but suppose I could just paint since I also like the contrast between the white pedestal and a dark wall. I am assuming if I added the hardibacker it would make my new tile pieces stick out further from the old tile. Considering what the room liked like before anything will look better.

Could you take the beadboard up high enough so that it is the backsplash for the sink? If you paint it well and then protect it with poly or varnish, it should stand up to the water splash. This would also be cheaper than tile, less skill required. I don't think there is anyway to make the tile look good where the new would meet the old. By the way, it looks like you have 4 x 4 tiles in the shower with a 2 inch trim, not subway tiles which are rectangular.

No tile border above the beadboard. Just a horizontal piece of wood. A couple of coats of good enamel paint and you're done. Don't over think or over do this. You don't necessarily need a backsplash behind the sink.

Are you doing this yourself?
Your shower tile is surface mount, so you can simply remove the trim piece at the point you want to start the subway tile, and butt it into the existing square tiles. Sounds like this is a new adventure for you. If so, check out the classes at Home Depot (Lowes might also have them) for tile installation. The tricks you need to know will result in a job to which people say, "I can't believe you did this yourself!" instead of, "Gee, I noticed you did the tile yourself. . ."

THANK YOU... I am looking at more ideas and I am becoming a bigger fan of the beadboard. I can take it higher and will take the tile back to the store. The wall shown where toilet and sink will go is 6' and then the other side is 8' including the doorway. So hopefully taking the beadboard higher will not make it appear too small?

Yes, this is a new adventure and I have big ideas and little knowledge on how to pull it all together. I read and watch u-tube videos. You guys are great help. I fell in love with a powder room on this site with turquois walls and subway tile and that has been my inspiration. I just dont know how to pull of the subway tile.

20 yrs old ...... if your budget allows, start fresh from the beginning. I have completed many bathroom reno's...... sometimes it pays to remove the old tile. A blank canvas is a great way to add your own ideas. good luck