This process is automated and much simplified with version 2 of Project Configurator. See the new process here, upgrade Project Configurator to version 2 and save lots of tie and effort!
The plugin only transfers the configuration of a project, not its issues, activity or attachments. If you want to transfer a project completely (configuration and issues) from one instance (A) to another (B) you could follow these steps:
1. Make a backup of instance A (suppose you get a file called "backup.zip"). See
2. At instance A, export the project's configuration to an XML file with Project Configurator (suppose you get a file called "project-config-dump.xml")
3. At instance B, load the file "project-config-dump.xml" with Project Configurator. Tell the plugin not to load "versions" and "components". Now you should have in instance B a project as you had in instance A, but empty, i.e without issues.
4. With "Jira Import Tool", import the project from the file "backup.zip". This step requires that the project does not have versions or components, this is the reason for the exclusion of these entities in step 3. See https://confluence.atlassian.com/display/JIRA/Restoring+a+Project+from+Backup
Filtering unused custom fields...Versions 1.4.5 and earlier
In step 2, if you want to filter custom fields not used by the project and you have version 1.4.5 or earlier of the plugin, use the last option, as described here:
"Export custom fields included in previous option plus those that have values for any of the issues in the exported projects"
This will ensure that all custom fields required in step 4 have been transferred to the destination instance.
Moving a group of projects
If you are not moving a single project but a group of them, you will have to perform the steps 1-2-3 once and step 4 as many times as projects you want to move from instance A to instance B. In step 2, choose the Project Configurator option to export all projects (as you want to move all of them).