Al's Photoshop TutorialOld Course (Versions 4.0 through 6.x)

Fog

Fog should be one of the last things you do. Your image should be pretty much the way you want it to be before you do fog, because it is an effect that cannot update itself according to changes on the layers below. The image you use should already have a background, but if there is text or other foreground elements that are not part of the picture, their layers should be deactivated for this effect.

The theory is pretty simple. We're going to make a duplicate layer that contains all the picture elements, blur it, and blend it in, giving the impression of a haze or glow.

First, go to Edit » Select All. Then, go to Edit » Copy Merged. What we've done here is we have selected the entire picture, and then copied it. The difference between Copy and Copy Merged is that Copy only copies data from the current layer; Copy Merged copies it from all visible layers. When we hit Edit » Paste, A single layer will be created that looks like all the other layers combined. Move this to the top, but if you have text layers, they should be above this.

Now, go to Filter » Blur » Gausian Blur. Give it a nice wide radius, enough to blur out all the details but not so much that the image becomes a single blob. From here there are a number of different types of fog:

Normal:
Simply turning down the transparency on the blurred layer about halfway will give you this effect. It's a moody, dark fog.
Overlay:
Turning the fog layer's mode to "Overlay" will make it amplify the richness of the colors below it. Don't use this too much or everything will look oversaturated.
Screen:
Turning the fog layer's mode to "Screen" will make a fog that only adds and doesn't subtract from the layers below it. This is a bright, dreamy fog, kind of like the old Vaseline-on-the-lens trick in photography.
Glow:
Using the Screen mode as above, and also using Image » Adjust » Levels to restrict it to just the brightest colors, you can make a bright glow around just the brightest parts of a picture, in this case just the towel and the eyes.

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