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Click in the image to add point type. Paragraph type is entered by clicking and dragging a bounding box, and then adding text inside it. While you are adding or editing type, the options bar will change to be in edit mode. Type may be edited by drag-selecting and applying new options. If you move the cursor a little ways away from the type you’ve added, the pointer becomes the move tool, and type can be repositioned.

If you are happy with the type you’ve added or changed, accept it by either clicking the large check mark on the right end of the options bar, by pressing the Enter key on the numeric keypad, or by pressing Ctrl-Enter on the regular keyboard. If you don't like your changes, and don’t want to accept them, click the big X on the options bar or press the Esc key.

Each time you use the type tool, a new layer is created with that text on it. Any of the layer styles, or other layer options can be applied to type layers.

Point type enters the text in a line from the point where you first click. Line breaks may be created by pressing Enter, but otherwise, the type does not wrap. If you have difficulty positioning point type exactly where you want it, apply it (click the big check box) and then move it with the move tool. To do this, be sure you’ve selected the type layer which has the type you want to move, then choose the move tool in the toolbar. Drag, or press the arrow keys to move the text layer in one pixel increments.

Paragraph type is entered in a bounding box. Text will wrap to stay within the box. If you add more type than will fit within the box, it will be indicated by an overflow icon, and the overflow type will not show in the image. Resizing the text box by dragging a corner will allow the overflow text to show. Pressing Enter creates a new paragraph, not a line break, in paragraph text.

The bounding box can be rotated, skewed, and resized. If you don't want to see the bounding box outline, choose View > Show > Text Bounds. Selecting that option in that menu toggles it on and off.

The type mask tool creates a selection outline in the shape of the letters typed. You can do anything with that outline that you can do with any other selection. Unlike the regular type tools, this one does not appear on its own layer. The type is added to the current, active layer. It is preferable to use this tool on an image layer, and not any type layer that you may have added previously.

You can do anything with a type layer that you can do with a regular layer such as duplicating it, changing the stacking order, applying layer effects and styles, and changing layer opacity. However, some of the Photoshop features will not work on a type layer. For example, if you want to apply filters to your type, you will need to first turn the type layer into a regular layer. After you've done this, the type becomes part of the image and cannot be edited as type any more. To turn a type layer into a regular layer, select the layer in the Layers palette, and then choose Layer > Rasterize > Type.

Tip - The default setting for type is to use fractional character widths. This is best in most cases. However, when using type sizes smaller than 20 points for online uses such as web sites, fractional character widths can make your type look terrible. The spacing will be inconsistent with some of the letters running into each other, and others too far apart. Turn off fractional widths by going to the Character palette, and clicking on the little arrow in the upper right corner to access the palette menu. Click on Fractional Widths to toggle it off. Turning this setting off will affect all text on the currently selected layer.