I usually format any new external hdd to Mac OS HFS filesystem (when I get something for my Mac, it stays with my Mac, so no need to plug it into some Windows computer even though I have one) and for that I use Disk Utility. It's in /Applications/Utilities, make sure the disk is plugged in, and you should see it listed among the devices so you can format it.
Do this prior to putting anything on it though, as that will wipe out whatever's on that disk.
It's kind of a waste of 500 gig to have it formatted FAT32, and it's no good to format it to NTFS (which Mac OS can read, but not write.)