In this Photoshop Basics tutorial, we'll learn how to create fun designs and interesting logos by combining text with custom shapes. First we'll learn how to convert the text itself into a shape. Then we'll learn how to add other shapes to it and even how to cut shapes out of letters. The design we'll be creating here is very simple, but you can use these same steps to design anything you can imagine, especially if you know how to make your own custom shapes in Photoshop!
I'll be using Photoshop CS5 for this tutorial, but any recent version of Photoshop will work. Let's get started! Before we can combine our text with shapes, we first need to convert the text itself into a shape. Before you do, though, make sure you have everything spelled correctly because once the text has been converted into a shape, it will no longer be editable. The text will still look like text in the document, but in the Layers panel, we see that the Type layer has become a Shape layer. The text is now a shape that looks like text. We're going to learn how to add other shapes to our text and how to subtract shapes from the text.
Converting text to a shape and preparing to subtract a hole
Let's start by seeing how to subtract a shape, or in other words, how to cut a hole out of a letter with a shape. In a moment, I'm going to use one of Photoshop's custom shapes to replace the hole in the center of the letter "o" with something that looks more interesting. Before I do that, I should remove the hole that's already there, which means I need to delete part of the shape. To do that, we need to select the part we want to delete using Photoshop's Direct Selection Tool.
The difference between the Path Selection Tool (sometimes referred to simply as the "black arrow") and the Direct Selection Tool (the "white arrow") is that the Path Selection Tool is used for selecting entire shapes at once, while the Direct Selection Tool can select just the part(s) we need. Before we select anything though, make sure the shape's thumbnail is selected in the Layers panel. You'll know it's selected because it will have a white highlight border around it. When I release my mouse button, small squares known as anchor points appear around the shape. It's hard to see in the screenshot, but if you look closely at the shape in your document, you'll notice that the anchor points within the area you dragged around appear as solid squares, while the others appear as hollow outlines. Selected anchor points appear as solid squares. To delete the selected part of the shape, simply press the Backspace (Win) / Delete (Mac) key on your keyboard.
Select Photoshop's Custom Shape Tool from the Tools panel. With the Custom Shape Tool selected, make sure the Shape Layers option is selected in the Options Bar along the top of the screen. This opens the Shape Picker, which displays small thumbnails of all the shapes we currently have to choose from. Rather than use any of the default shapes, I'm going to load one of the other shape sets included with Photoshop. This pops open a menu with various options, and at the bottom of the menu is a list of the other shape sets we can choose from. Photoshop will ask me if I want to replace the current shapes with the new shapes or if I just want to append the new ones to the end of the list. If I look back in my Shape Picker and scroll down, I see that I now have some new animal shapes to choose from. To select a shape, simply click on its thumbnail. I'll choose the Dog Print shape by clicking on it.
Directly to the right of the shape preview thumbnail in the Options Bar is a series of five icons, most of which look like overlapping squares. Clicking on these different icons allows us to switch between different drawing modes, like Add to shape, Subtract from shape, Intersect shapes, and others. The problem with choosing drawing modes by clicking on these icons in the Options Bar is that each time you need to switch to a different mode, you have to drag your mouse up to the Options Bar and select it manually. Also, it's too easy to forget which one is selected, so you'll go to draw a new shape only to end up adding it to an existing shape because the "Add to shape" option is the one you used previously and you forgot to change it back.
A better way to switch between drawing modes is with the much faster keyboard shortcuts, which allow us to switch between modes temporarily and always revert back to the default "Create new shape" mode as soon as we release the key! For example, to subtract a shape from an existing shape, rather than choosing the Subtract from shape option in the Options Bar, simply hold down your Alt (Win) / Option (Mac) key on your keyboard. You'll see a small minus sign ( - ) appear in the bottom right of your mouse cursor letting you know you've temporarily switched to the "Subtract from shape" mode. With the Alt (Win) / Option (Mac) key held down, click inside the shape you want to cut a hole through and drag out your new shape. You'll see a thin outline of the new shape appearing inside the original shape. To constrain the aspect ratio of the new shape as you're drawing it, hold down your Shift key as well. To move and reposition the shape as you're drawing it, hold down your spacebar, drag the shape to a new spot with your mouse, then release your spacebar and continue dragging.
Addition and adjustment of additional shapes
This time, let's add a new shape to the text. Click once again on the shape preview thumbnail in the Options Bar to open the Shape Picker, then click on a different shape to select it. I'll choose the Dog shape this time. To add the new shape to the text shape, we need to be in the Add to shape mode, and we can switch to it temporarily by holding down the Shift key. You'll see a small plus sign ( + ) appear in the bottom right of your mouse cursor, letting you know you're about to add the new shape to the existing one. With the Shift key held down, click inside the document and begin dragging out the new shape (again, make sure the shape thumbnail is selected in the Layers panel). A thin outline of the shape will appear as you drag. It may look like we have more than one shape in the document, but we can see in the Layers panel that we still just have the one.
Don't worry if you didn't position or size the new shapes exactly right on the text. You can easily go back and make changes. For example, I'd like to move and resize the dog shape I added a moment ago. To do that, I first need to select the shape using the Path Selection Tool. Whichever tool you used previously will be the one appearing in the Tools panel. Click with the Path Selection Tool anywhere inside the shape you want to select. In my case, I want to select the dog so I'll click inside of it. This brings up Photoshop's Free Transform Path box and handles around the shape. To resize the shape, simply drag any of the four corner handles. To keep the aspect ratio of the shape intact as you resize it, hold down your Shift key and you drag the handles. To move the shape, click anywhere inside the bounding box and drag it around with your mouse. You can also rotate the shape if needed by clicking anywhere outside the bounding box, then dragging with your mouse. I'll do the same thing with the Dog Print shape I used to cut a hole in the letter "o". Even though the Dog Print shape is being used to subtract an area from the letter, the shape itself is still fully editable. First, I'll select it by clicking anywhere inside of it with the Path Selection Tool. Then I'll press Ctrl+T (Win) / Command+T (Mac) to quickly bring up the Free Transform Path box and handles around the shape, and I'll resize it by dragging one of the corner handles. I'll press Enter (Win) / Return (Mac) when I'm done to accept the changes and close out of the Free Transform Path command, and I'm done!
Text inside shapes: creating text frames
In this Photoshop Basics tutorial, we'll learn how to create some interesting text layouts using custom shapes as text frames. In other words, we'll be drawing a shape using one of the custom shapes that ship with Photoshop, but rather than filling the shape with color as we normally would, we'll fill it with text! Select Photoshop's Custom Shape Tool from the Tools panel. This opens Photoshop's Shape Picker, which displays small thumbnails of all the custom shapes we can choose from. To select a shape, just click on its thumbnail. I'm going to choose the heart shape. Near the far left of the Options Bar is a row of three icons, each one representing a different type of shape we can draw. Photoshop gives us a choice of drawing normal shapes, paths, or pixel-based shapes. To use a shape as a container for our text, we want to draw a path, which is essentially an outline of the shape. We'll be placing our text inside the outline. With the Paths option selected in the Options Bar, click inside your document and drag out your shape. You'll see your shape appearing as a thin outline as you drag. You can hold down your Shift key as you drag to force the shape to keep its original appearance while you're drawing it. If you need to reposition the shape as you're drawing it, hold down your spacebar, drag the shape to where you need it in the document, then release your spacebar and continue dragging. Click and drag out your shape in the document. If you need to reshape or rotate the path (the shape outline), or move it to a different spot, the easiest way to do it is by going up to the Edit menu in the Menu Bar along the top of the screen and choosing Free Transform Path. This places the Free Transform Path handles and bounding box around the shape. To reshape it, simply click on any of the handles (the small squares) around the bounding box and drag them. To resize the shape, hold down your Shift key and drag any of the four corner handles. To rotate it, move your cursor anywhere outside the bounding box, then click and drag with your mouse. Finally, to move the shape, click anywhere inside the bounding box and drag. Now that we have our path, we're ready to add our text! Select the font you want to use for your text in the Options Bar. This opens Photoshop's Color Picker. I'll choose a dark green from the Color Picker to match the color from the flowers in my image. This opens Photoshop's Character and Paragraph panels which are hidden by default. With the Paragraph panel now open, click on the Justify Centered option to select it. This will make it easier for the text we're about to add to fill the entire width of the shape. At this point, all that's left to do is add our text. Move the Type Tool's cursor anywhere inside the shape. Click anywhere inside the shape and begin typing your text. To hide the path outline, simply click on a different layer in the Layers panel. The path will be visible when the text layer is active. And with that, we're done! You can easily shape text so it forms a custom shape using Photoshop CC. This is a great way to express yourself. For example, you can write a poem in the shape of a heart, report facts in the shape of an animal, or describe your personal interests in the shape of a star. Choose a custom shape from the panel. Draw a shape. Position the I-beam inside the shape. Select the text. Use the tools on the Options bar to format the font, style, size, and color. Select the text layer. Click the Move tool. If you need to edit the shape, select the Shape layer.

How to Fill Letter Shapes with Link Threaded Text in Adobe Illustrator
In this article we explored converting text to a shape, cutting holes with subtractive shapes, adding new shapes to text shapes, and creating text frames inside custom shapes. The techniques work across recent Photoshop versions and open up creative possibilities for logos, posters, or decorative typography using your own custom shapes.