There is a lot of different kind of picture format you can choose, it sometimes make it harder to know which format to use for your kind of work so i will try to help with that a bit by explaining the pro and cons for the most used picture formats. .GIF format: - .gif format is a format that used mostly for animation inside a pictures, that mean you can create picture that have few frames in it and choose time space between each frame. - .gif format support transparent background but only if you set the background transparent to a color you choose once you create the the file, the down side for that is that if your background is black and you set that in the .gif file you won't be able to put that picture on red background because it won't fit. - The downside of .gif format is that when you create a file you will need to set color table with all the colors that used in the image today photoshop allow to use only up to 256 colors. And sometimes when you create gradient and save the .gif file you won't get the 100% of the picture quality. Summary: You should use .gif format mostly for creating pictures with animation (banners) and not for something else. .JPEG format .jpeg is a great format to save pictures that allow you flexibility with the picture size. You are able to control the quality of the picture and by doing that you can make the file size bigger or smaller. This format as one big downside - when you save a picture on jpeg each time you will open the picture that you saved, you will lose a bit of the quality when you save that again as jpeg. So don't save it as jpeg if you think you will edit that picture once more. .PNG format .png format is one of my favorites, saving a picture as .png will give you great quality for that picture and .png allow you as well to save pictures with transparent background. The downside is that you have less control on the image size and the image size can sometimes be big. Summary: Use this format if you need to save picture with transparent background. .TIFF format .tiff if picture format that allow you to both save a file with layers and have a transparent background. The problem with .tiff is that the file size is really big and for that reason you should not use it. If you will save file as .tiff the size of that file will probably will be bigger then if you save it as .psd (Photoshop file that allows you the same options and more). .PSD - Adobe Photoshop source file. .AI - Adobe Illustrator source file .FLA - Adobe flash source file .INDD - Adobe Indesign source file .PDF - Adobe Acrobat file I am sure that there are more formats that i missed but i tried to bring you the most popular picture format that used out that and to help you with the decision of which format to use.