Convert to Smart Object

"Smart object" is a kind of "child" file embedded in its "parent" document.

in the Layers palette you can recognize a smart object by special symbol on its thumbnail.

How to create a smart object in PSE:

  1. In the Layers panel, select a source layer. To make a smart object from several layers, combine those in a layer group.

    On the screenshot, the source layers are inside the "Group 1".

  2. In the Effects panel, double-click the "Convert to Smart Object" thumbnail. Done!

Why use smart objects? Well, the first reason is, that they can be transformed non-destructively (more about).

And even more important reason is smart filters. Imagine, that you can apply several filters to a text and then edit its contents without starting all over again.

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Converting 4 selected layers to smart object