Most of the content that a user manipulates in Photoshop is raster based---bitmapped images. Most of the tools are designed to operate on this sort of data. Other content exists, however, that isn't or is not entirely raster based: type, shapes, fill layers, Smart Objects, video, 3D. Often users must merge this content with photo content or other raster-based content to create a final piece of artwork. To do this they use the Rasterize command to transform non-bitmapped images into pixel based data that can be merged with other layers and fully edited with all of Photoshop's pixel-based tools.
The two most commonly rasterized items are shape and type layers—both contain vector data. Unlike raster images Photoshop displays the points, lines and planes that make up vector drawings using underlying mathematical or algorithmic information. This means that they need not be manipulated pixel by pixel; instead, users may select them with a single click, scale and rotate them without degrading image quality, alter their color or other attributes with ease and print them at any resolution.
Until a user decides on a final composition type should remain as vector artwork on its own layer. It isn't possible, for example, to select a font size and style, rasterize the type, apply a blur (or similar pixel based) filter and then change one's mind and go back and simply alter the font size and style. Type, by its nature, needs to remain in vector form during preliminary layout so that changes in font size or style remain clear and crisp at any setting. Users should rasterize type only after most typography decisions are complete and edits need to be finished at the pixel level.
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When a user creates a new shape using any of the shape tools, Photoshop creates a new layer composed of a fill layer--filled with the current foreground color--linked with a vector mask in the shape of what the user drew. Unlike drawing shapes in vector illustration applications, drawing in Photoshop incorporates multiple steps: covering the active layer with a fill layer, generating a vector mask based on what the user draws and revealing all parts of the underlying layer covered by the mask. Understanding shape rasterization requires understanding these steps.
Photoshop offers three options for rasterizing a shape layer. The command: Layer > Rasterize > Vector Mask leaves the fill layer portion of a shape untouched but converts the vector mask portion into a regular layer mask which, for example, a user may edit with a brush. The command: Layer > Rasterize > Fill Content leaves the vector mask portion of the shape layer untouched, and instead converts the fill layer portion into a plain raster layer filled with the same color as the original fill layer. Finally, the command: Layer > Rasterize > Shape merges the fill layer and the vector mask creating a regular layer without a mask in which only areas that were beneath the vector mask's shape contain color.
Other Layers: Fill, Smart Objects, Video and 3D
Rasterizing a fill layer via Layer > Rasterize > Fill Content converts the fill portion of the layer into a regular raster layer and leaves the layer mask untouched--similar to creating a shape layer and calling Layer > Rasterize Vector Mask followed by Layer > Rasterize > Fill Content. Rasterizing a Smart Object layer breaks the Smart Object's link with the original file and turns it into a regular raster layer ready for pixel editing. With Video or 3D layer rasterization the user selects a single video frame or a particular 3D angle of view respectively and rasterizes that to create a single editable two-dimensional still image raster layer.