Since the room is so narrow, I would look for mural wallpaper that would give a sense of depth to the room.

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If you want to keep it simple, just paint the room an interesting color. Use a color that is used in the rest of the house, or something completely different. It can be light or dark or in between. Get an interesting mirror. Have you bought a light fixture yet? Sometimes wallpaper is used only on the sink wall, or it can be used on all four walls. Some people do wainscot.

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Here’s another approach if wallpaper is too expensive. Paint the room a color that makes you happy.

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Wainscot, as mentioned, is very nice in a small bathroom. If you add it, go to windowsill level. Then just paint the top or wallpaper the top.

Suggest looking at lots of small powder rooms for mirror/lighting, color combination, wallpaper or not, window treatment, and accessories. There are endless looks, but I picked the idea below based on your navy towel (ceiling would be navy vs black).

Great ideas from everyone.

You have a nice blank slate here, what decor styles do you like? Lots of directions you could go. What style is your house?

Are you planning to DIY it, or hire out?

Is this the powder room that guests use? If so, think "tiny jewel box" designed to impress!

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A painted accent wall on the far wall with simple decor to draw the eye up and away.

We have this privacy film on our bath window...looks good. A coat hook on the door. Natural wood storage.

Link: https://www.ebay.com/itm/324817048552

Go bold. With either pattern or color or both.

Here are some ideas.

Lots of great ideas here! Love this thread

Thanks to all that responded. Many good ideas to think about.