Learning how to format text in Photoshop is one of the most essential skills for graphic design work in the program. After all, what good is it to create a piece of text if you don’t know how to format it as you want? Luckily, learning how to do this is very simple.

The easiest way to format text in Photoshop is with the Character Panel. This can be accessed by going to Window > Character. Within this panel, you can control many formatting adjustments such as font, text size, kerning, leading, tracking, and other important alignment options.

So in this tutorial, I will walk you through not only the Character Panel but also ways to format text with the Type Tool and the Paragraph Panel as well.

Understanding The Paragraph & The Character Panels In Photoshop 

The Type Tool, Paragraph panel, and Character panel are the most important Photoshop functions when using text. 

All three functions offer great formatting features to help ensure a professional typographic design in Photoshop. It’s good to know what each function offers.

The Options Bar 

I want to first discuss the Options Bar. This is the first port of call after selecting the Type Tool (T). There are minimal text formatting options here, but they might come in handy.

When the Type Tool is selected, the Options Bar will display various settings at the top of your Photoshop window. 

There are dropdown menus for font choice and font styles, a font size menu, paragraph alignment options, and a color swatch.

All of the settings in the Options Bar are also available, along with more, within the Character and Paragraph panels.

The Paragraph Panel 

The Paragraph panel is used for formatting paragraph text. This is best for adjusting large amounts of body text to fit into your design. 

To open the Paragraph panel initially, go to Window > Paragraph

When enabled, the Paragraph panel button appears on the vertical toolbar on the right-hand side of the workspace, alongside other panels that you can choose to display, making it easy to hide or show when needed.

Within the Paragraph panel, there are the three alignment options for left, center, and right like the ones found in the Options Bar. Next to those are four justification options to justify text: left, center, right, and all. 

The other settings in the Paragraph panel are for setting left and right margins and indents, adding spaces before or after paragraphs, and adding hyphenation for long words. Each of these settings helps you present your text in ways to best fit the space provided while retaining readability and a professional standard. 

The Character Panel 

The Character panel is similar to the Paragraph panel, only its tools focus on settings for the characters within the text rather than the text as a whole. 

To open the Character panel initially, go to Window > Character

The Character panel will appear on the same vertical toolbar as the Paragraph panel, and it can also easily be hidden or shown at the click of a button. 

Some of the tools in the Character panel are similar to those found in the Options Bar. Standard type settings like font type, font style, font size, and color are found in both. 

But there are some tools that you can only find in the Character panel, and they can be helpful with formatting your text, such as leading, kerning, and tracking, as well as vertical and horizontal scaling tools.

You’ll also find some extra font styles like bold, italics, underline, strikethrough, and superscript to add some style to your text. Under the font styles are further stylish offerings of ligatures — if the font includes them — as well as a language tool to avoid spelling errors. 

How To Align Text In Photoshop 

Text alignment sets which edge the text always starts from and is usually based on how the language is read — for example, English is read left-to-right, so most text is left-aligned to allow for easier reading. 

As I’ve previously mentioned, you can find the three alignment options in both the Options Bar when the Type Tool is selected as well as any time you open the Paragraph panel.

Align Text Using The Options Bar 

To set the alignment using the Options bar, select the Type Tool (T)

Then in the Options Bar, select one of the three alignment options — right, center, or left-aligned — to align your text.

Standard alignment for most English text is aligned flush left and ragged right.

Align Text Using The Paragraph Panel

You can also use the Paragraph panel to align text. The benefit of using this instead of the Options Bar is that you can open the Paragraph panel even when using another tool, which is helpful if you need to make a quick change and then carry on with the previous tool.

First, in the Layers panel, select your text layer. If you have multiple text layers, you can select all the text layers you wish to apply the same alignment to.

Open the Paragraph panel and click one of the three alignment options to align your selected text.

The direction aligns the text flush to the chosen side giving the other side a ragged edge. 

The center-aligned text has a ragged edge on both edges.

Justify Text Using The Paragraph Panel

Next to the alignment options are the justification options which are different from alignment. Justified text horizontally fills the text box which gives flush text on both sides. To ensure both sides of text have flush edges, unlike the ragged edge that comes from using non-justified text, extra gaps may appear in between words. 

The left, right, or center-justified text options only move the last line — known as the orphan or widow — of text to either direction. 

How To Center Text To Objects In Photoshop 

You can center your texts to objects or the canvas itself, to create a center-balanced design. Whether your object is a shape, image, or even another text box, it’s easy to center it to your text.

This technique is best done with point text rather than paragraph text; using paragraph text will center from the text box, which may not be the center of your text itself. Using point text will center on the true center of the text. 

I will show you how to center text to an object; I’m using the Ellipse tool (U) for my shape.

In the Layers panel, hold Control (Win) or Command (Mac) while selecting the text and object layers you want to center. To center all of the layers, hold the Shift key and click the top layer, then the bottom layer and all the layers in between will be selected.

Then select the Move Tool (V) which will bring up alignment options in the Options Bar.

Click the Align horizontal centers option to align the text and the object with their individual horizontal centers.

And clicking the Align vertical centers option aligns the selected layers by their individual vertical centers. If you have clicked both alignment center buttons, it will align everything to the center.

You can also align the text or an image to the center of the canvas in the same way as long as you select the Background layer in the Layers panel along with the other layer you want to align.

How To Indent Paragraphs In Photoshop 

Using the Paragraph panel, you can format indents and margins to your written paragraphs. These are an important part of layout design and are very easy to implement. 

In the Paragraph panel, change the indent setting to set a paragraph indent, which moves the first line of text inwards. 

To create separate paragraphs, press Enter on your keyboard and the indent will appear at the beginning of all paragraphs. You can also set a specific spacing above paragraphs by changing the point value.

How To Edit Character & Line Spacing In Photoshop 

You can use the Character panel to edit spacing between text including individual characters or whole words. There are three main ways to edit spacing: kerning, tracking, and leading. Changing any of these three adds to the finer details of your text formatting, so what are these settings for?

What Is Kerning? 

Kerning determines the space between individual letters in a word. Sometimes the gaps between letters in a standard font look unnaturally large or small which negatively affects the readability of a word. You can see the inconsistent spacing between the letters d, i, and p in my example below.

To use the kerning feature, select the Type Tool (T) and click the cursor between the two letters you’re editing. 

In the Character panel, adjust the kerning settings up or down until you’re satisfied. 

You can type your own metrics or click the dropdown Kerning menu to choose a kerning metric. Minus numbers will reduce the space and positive numbers will increase it. 

The result after kerning is often subtle, but it can make a huge difference in the finer details of text formatting.

What Is Tracking?

Tracking determines an entire word’s spacing, rather than individual spaces. Sometimes adjusting the tracking can help with fitting words into a small space without changing the font size. 

Adjusting the tracking rather than the font size keeps your design elements balanced and saves you from having to redesign your text.

Tracking is, again, found in the Character panel

To apply tracking, highlight the word you wish to affect. You can apply tracking to letter groups, full words, or groups of words. Whatever is highlighted will be affected.

You can type a value into the tracking box or click the dropdown to choose a value. Positive numbers increase space and minus numbers decrease space between the letters.

I set the tracking to -50, which has decreased the spacing of the highlighted word. Now it’s narrow enough that it fits at the end of the previous line. You can use tracking as an artistic effect with tight or loose spacing or for functional uses, like my example.

What Is Leading?

Leading determines the spaces between lines of text. When writing a paragraph, you may need more or less space between lines for better readability or design style.

You can change the leading to affect all the lines or you can highlight an individual line to increase or decrease the space above it. Leading only affects the space above the highlighted line, not the space below it. 

The Leading setting is found in the Character panel above tracking.

Default leading is set to auto for any given font. But if your paragraph has multiple font sizes, you’ll have to manually change the leading.

Leading values are the same as font-size values. The dropdown menu has a list of point sizes. 

Highlight any lines of text you wish to change the spacing between, and choose a leading value in the dropdown menu.