Layer masks

Masking is very good function of Adobe Photoshop because you can add a mask to a layer and use the mask to hide portions of the layer and reveal the layers below. Masking layers is a valuable compositing technique for combining multiple photos into a single image or for making local color and tonal corrections.

About layer and vector masks

You can use masks to hide portions of a layer and reveal portions of the layers below. You can create two types of masks:

• Layer masks are resolution-dependent bitmap images that are edited with the painting or selection tools.
• Vector masks are resolution independent and are created with a pen or shape tool.

Layer and vector masks are nondestructive, which means you can go back and re‑edit the masks later without losing the pixels they hide.

In the Layers panel, both the layer and vector masks appear as an additional thumbnail to the right of the layer thumbnail. For the layer mask, this thumbnail represents the grayscale channel that is created when you add the layer mask. The vector mask thumbnail represents a path that clips out the contents of the layer.

Note:

To create a layer or vector mask on the Background layer, first convert it to a regular layer (Layer > New > Layer from Background).

Masking layer
A. Layer mask thumbnail  B. Vector mask thumbnail C. Vector Mask Link icon D. Add Mask

You can edit a layer mask to add or subtract from the masked region. A layer mask is a grayscale image, so areas you paint in black are hidden, areas you paint in white are visible, and areas you paint in shades of gray appear in various levels of transparency.

Background painted with black; description card painted with gray; basket painted with white

A vector mask creates a sharp-edged shape on a layer and is useful anytime you want to add a design element with clean, defined edges. After you create a layer with a vector mask, you can apply one or more layer styles to it, edit them if needed, and instantly have a usable button, panel, or other web-design element.

The Properties panel (CS6) or the Masks panel (CS5) provide additional controls to adjust a mask. You can change the opacity of mask to let more or less of the masked content show through, invert the mask, or refine the mask borders, as with a selection area.

Masks panel (CS5) and Properties panel (CS6)
A. Select the filter mask.

B. Add a pixel mask.

C. Add a vector mask.

D. Panel menu.

E. Apply Mask

F. Layer mask

G. Vector mask

Source: http://helpx.adobe.com/photoshop/using/masking-layers.html