Sheath is the noun: the protective case a blade, cable, or even a fitted dress sits in. Sheathe is the verb: the action of putting something into that case, or encasing it in a protective covering. A quick memory trick: sheathe needs that extra e to make room for the verb ending, the same way describe needs its e to work as a verb.
The core difference
Sheath is the covering itself; sheathe is the act of putting something into a covering.
- sheath — a close-fitting protective cover: He slid the hunting knife back into its leather sheath.
- sheathe — to put something into a sheath or encase it protectively: He sheathed his sword before greeting the ambassador.
How to tell them apart
The pattern here matches other noun/verb pairs in English where the verb form adds a silent e, such as breath/breathe or bath/bathe. Sheath is the object: it can mean the case for a blade, but also any close-fitting protective covering, from the rubber insulation on a cable to a slim, fitted "sheath dress." Sheathe is what you do with that object: to put a knife into its sheath, to encase something in a protective layer, or, for an animal, to retract a claw or other body part back into the body.
The mix-up shows up most often in writing about knives, swords, or cables, where a sentence needs the verb ("he sheathed the blade") but the writer drops the final e out of habit from the noun. If you can put an "a" in front of the word and it still makes sense ("a sheath"), you want the noun without the e; if the word is doing the action, add the e.
