Open Photoshop. Click "File" and "New" to open a new image.
Double-click the image in the "Layer" palette and rename it to create your first layer and "unlock" the image.
Select "Layer," then "New" to create a new layer. Name it anything you like.
Make sure the photo image layer is selected in the "Layer" palette. (It will be highlighted in blue.) If not, click on the layer in the palette.
Click the "Add layer mask" icon in the "Layer" palette to create a layer mask for the image.
Click the "Gradient" icon in the toolbox and choose a full black-and-white gradient at 100 percent opacity.
Left-click and drag the cursor across the area of the photo you want to make transparent. The checkered background will appear in this area. You have just added a transparent fade to a photo.