Add text on a separate layer

Step 1 - Open image, display Layer palette
Open the image you wish to modify. Also, make sure the Layer palette is displayed.
Step 2 - Select Text tool
From the Tools toolbar, select the Text tool.
Select this tool for me.
Step 3 - Set Tool options and text color
In the Tool Options palette, make sure Vector is selected in the Create As drop-down. Here you can also set other options (Font, Size, etc.). In the Materials palette, set the color options. Standard text most often has a solid color (usually black) fill and no stroke.
Step 4 - Click on image
Click where you want to place the text. The Text Entry dialog appears.
Step 5 - Enter text, click Apply
Enter the text, and then click Apply.
*Optional* Step 6 - Move or modify the text
At this point you can use the Object Selection tool to move or modify (rotate, scale, etc.) the text. You can also adjust the text layer's opacity via the Layer palette.
Notes and Tips:
Adding vector text on a separate layer allows you much more editing flexibility. If the text itself may change, you should save a version of the image in the .pspimage format to retain the layers.
Be aware that if you save the file to a format that does not support layers, the text will be merged with the other layers.

Learn More:
View a movie about this topic
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