Open the image you want to cut the background out of in Photoshop. Then double-click the layer and hit OK to unlock it. Make sure it is a high resolution (300DPI) for print projects.
Remove the background from your layer. There are several ways you can do this. If the background is a solid color you can use the Magic Wand or Quick Selection tools. This tutorial will not go in depth on how to cut out an image from the background since the focus is on saving and placing a transparent image into InDesign.
Next go to File>Save As and make sure you select PNG from the drop down. Note this only works for RGB files. Since you can convert all elements of your print project into CMYK when you save your PDF in InDesign, you can use this RGB file for any print or web project. Give you PNG file a name, choose the location to save it and click Save. Select None in the PNG options pop up window and click OK. You have now successfully created a transparent file to use in your print projects.
Now let's open up InDesign. Create a new document to your desired size. Mine is a sample album cover so it is 4.724 inches square with a 1/8 inch bleed.
Drop in your background image by clicking and dragging it from your folder into InDesign or CTRL+D (Option + D on a Mac) to Place. Then move the background image until you are happy with the placement. You can also resize the image by holding down CTRL+Shift (Option + Shift on a Mac) and clicking and dragging a corner of your image. This constrains the proportions as you resize the image. Make sure your image goes all the way to the red bleed lines.
Drop in your transparent image by clicking and dragging it from your folder into InDesign or CTRL+D (Option + D on a Mac) to Place. Follow the steps above to resize and place your transparent image. You shouldn't see any background color on your image. If you do, make sure you saved the file as a PNG. Note I would clean up this image with some color correction to better match the background image. This is just to show you how a transparent image from Photoshop can be dropped into your print project in InDesign quickly.
Now that you dropped in your transparent PNG image, you can continue designing your document. Add text, more images, etc. I cleaned up the PNG file in Photoshop by adding some color corrections. I also used the Blur tool around the outside edge of the entire image to soften the harsh lines. This makes the final PNG blend better with my background image when I drop it back into InDesign.
Pro Tip: Keep your designs consistent and use colors from your background and transparent images for the text.
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