Painting air dry clay well is mostly surface preparation. The body is porous and slightly absorbent, it takes colour readily and unevenly, and a finish that looks perfect on the table wears at the edges within weeks if nothing protects it. Three steps fix all of that and none of them is expensive.
Smooth it wet, not dry
A damp sponge over a leather-hard or dry piece removes tool marks and high spots without making dust, and it leaves a surface that takes paint evenly. Dry sanding does the same job while putting respirable crystalline silica into the air, so wet is both safer and better. Work in circles rather than straight lines, and let the piece dry again fully before any paint goes near it.
Prime, or accept a patchy first coat
Air dry bodies absorb unevenly, so a first coat of colour goes matt in some places and glossy in others. A thin coat of white acrylic or gesso evens that out and makes the colour above it read true, which matters most with reds and yellows. On a small piece this costs a few minutes; on anything with detail it is the difference between one coat and four.
Air dry clay paint that survives handling
Acrylic is the practical choice and it is what manufacturers name. Build it in two or three thin coats rather than one thick one, because a thick film on a porous body sits on the surface and chips at edges. Let each coat go properly touch dry. For anything that will be handled often, a matt or satin acrylic varnish over the top takes the wear that would otherwise land on the colour.
What the finish is not
A painted and varnished air dry piece is decorative. It is not food safe, it is not dishwasher safe, and it will not survive standing water. Those are properties of a fired and glazed body, and nothing applied at room temperature confers them. Said plainly here because the finished object can look convincingly like glazed ceramic, which is exactly the situation in which someone puts one in a sink.
Questions people ask about air dry clay
What is the best paint for air dry clay?
Acrylic, in two or three thin coats over a primed surface. It bonds well to a porous body and needs no solvent.
Do I need to varnish it?
Only if it will be handled or displayed somewhere damp. A satin acrylic varnish takes the wear that would otherwise remove colour from the edges.
Can I use spray paint?
Yes, in thin passes and with ventilation. It gives an even coat on detailed pieces where a brush drags, but it needs the same fully dry body underneath.