Transparent Type over Photo

Step 1: Add A New Blank Layer

Open your photo in Photoshop. It will be the Background layer. Add a new blank layer by clicking the New Layer icon at the bottom of the Layers panel:

Step 2: Fill the New Layer with White

You can go up to the Edit menu in the Menu Bar along the top of the screen and choose the Fill command:

Then choose white and make sure the Mode option at the bottom is set to Normal and Opacity is set to 100% (they should be by default) and click OK.

OR: You can fill the layer with the paint bucket, making sure white is your chosen color in the foreground.

Step 3: Lower the Opacity of Layer 1

Turn the solid white into a semi-transparent background for the text

By lowering the layer’s opacity value. You’ll find the Opacity option in the top right

corner of the Layers panel. By default, the opacity value is set to 100%.

The more you lower it, the more the photo below the layer will show through.

You can easily go back and change the opacity value at any time, so for now

set it to 70%.

Step 4: Add Your Text

Select the Type Tool from the Tools panel and choose your font and font size up in the Options Bar along the top of the screen. You can resize it later if necessary. Also, to make sure you can see the text in front of the semi-transparent white background, set the color of your type to black. With all of the font options set, click once inside the document window with the Type Tool and add your text. Click once and do not draw a box.

Step 5: Resize the Type

Make sure the Type layer is selected and choose a font size that works for your photo. Use the Move Arrow to position the type on your photo.

Step 6: Add the Type Layer and Layer 1 to a Layer Group

Place both the Type layer and Layer 1 below it into a layer group by holding down the Shift key and click on Layer 1 and the text layer to select both layers at once. Press CTRL + G to make them a group.

Open the group back up by clicking the triangle.

Step 7: Select the Type Layer

Now that the two layers are in their own group, you can add the transparency effect to the text. Placing the layers inside a layer group keeps the transparency effect constrained within the group itself so that only the layers inside the group are affected. Any layers below and outside of the group will not be affected.

Click on the Type layer to select it.

Step 8: Open the Blending Options

With the Type layer selected, click on the small icon in the top right corner of the Layers panel with the lines and choose blending options.

This opens the large Layer Style dialog box set to the main Blending Options. Under Advanced Blending, change the Knockout menu from None to Shallow:

Then drag the Fill Opacity slider above it all the way to the left to set its value to 0% and click OK.

Step 9: Select Layer 1 to Resize

Resize the white semi-transparent background so it surrounds the text without covering up the entire image. Click on Layer 1 in the Layers panel to select it and Choose Free Transform, (press Ctrl+T). Press enter when you are done.

At this point, you may want to go back and re-adjust the opacity value for Layer 1 to fine-tune the transparency of the white background surrounding the text. Increasing its opacity value will make the text more readable, while decreasing it will allow the text to fade more into the original image.

Final Image: