1. Open a photo/image, or create a background layer with a gradient.
2. If using a photo/image convert the background to a layer by double clicking on it. (Give it a name if you wish.)
3. I like to create a duplicate of the layer to work on so I can revert to the original layer if I don’t get the effect I want (right click on the layer and select ‘Duplicate Layer’, then hide the original layer, and select the duplicate for your work).
4. Select the Marquee tool (use the Elliptical Marquee tool if you want the fade to be all around the image).
5. Drag a marquee selection around the area of the photo you want to keep (usually give it about a 20-30% margin between your marquee selection and the edge of the image).
6. If you’re like me you didn’t get the marquee exactly where you want it on the first try, so with the marquee still actively selected go to the ‘Select’ menu, and choose ‘Transform Selection’. Then grab the handles on the four sides one by one and drag the marquee to the position that you want.
7. I even go so far as to save the marquee selection for later editing…go to ‘Select’ menu then ‘Save Selection’; when you are ready to edit the layer again go to ‘Select’ and ‘Load Selection’.
8. Click the “Add layer mask” button at the bottom of the layers palette (the marquee selection will disappear).
9. Click on the layer mask thumbnail in the layers palette.
10. Go to Filter > Blur > Gaussian Blur and make sure the Preview option is checked.
11. Adjust the radius until you are happy with the amount of fade and click OK.
12. If needed, add a layer under the photo and fill it with the desired background (only needed if not saving as transparent PNG). I like to add a dark layer underneath just while I’m editing the vignette, then I hide the layer before final output.
13. Save as PNG 24 file (be sure the Transparency box is checked).

Tips:

• I end up with the following layers after making duplicates of each step along the way:

• 1 background gradient or image

  2 marquee (positioned, before layer mask & filter)

  3 layer mask

  4 final (after filter, ready for output)

• You can paint in the layer mask with shades of gray for other effects. Just click the mask thumbnail in the layers palette to activate it for painting.
• The icon next to the eye in the layers palette will show a paintbrush icon if the layer is active, and a mask icon if the mask is active.
• If you decide you don’t like the effect, simply drag the mask thumbnail to the trash icon on the layers palette and then click discard.
• To reposition the vignette, click the link icon between the layer thumbnail and the mask thumbnail to move the mask independently of the layer. Don’t forget to relink them when you’re done.
• If you’re working with a gradient you can apply a 70% opacity to the layer, then save the vignette image as a separate PNG file, then open the PNG and paste it into another PSD image file for a nice soft vignette background effect.