You can paste one image onto another and blend the pasted image into the Background layer by changing the blend mode. The layer blending modes control how the colors in the top image combine with the pixels in the underlying image. They do not affect the texture of either image. To make the top image blend into the texture of the base image and make the final image appear more realistic, you can use the Distort filter and a special file called a displacement map.

A displacement map is a grayscale version of an image saved as a Photoshop file. The Displace filter then uses the displacement map essentially as an applied texture. The black areas are the low points and the light areas are the high points of the contours of the original image.

You create a displacement map of the background image and save it as a Photoshop file. Then you apply the Displace filter to the second image to be placed of top of the background image. You'll need two images to work through the following tutorial.

1. Open the photo that will be the background image.
2. Click Image.
3. Click Mode.
4. Click Grayscale to convert the image to grayscale.
5. Click Discard in the warning box that appears.

The image is converted to grayscale.

6. Press Command+Shift+S (Ctrl+Shift+S). The Save As dialog box appears.
7. Type Displace in the name field.
8. Click here and select Photoshop.
9. Click Save.
10. Click here to close the grayscale Displace image.

11. Open the image that will be blended.
12. Click Filter.
13. Click Distort.
14. Click Displace.

The Displace dialog box appears.

15. Type a lower value such as 10 to 30 in both the Horizontal and Vertical scale fields.

Note: The scale is the amount the filter will shift the selected pixels to make them wrap to the contours of the base image, based on the brightness values in the displacement map. A low to middle value generally creates a more realistic result for this task.
16. Click Stretch To Fit.
17. Click Repeat Edge Pixels.
18. Click OK.

Did You Know?
If your grayscale image has very strong contrasts, you can reduce the amount of texture in the displacement map image by somewhat blurring the image after changing it to grayscale. Click Filter and select Blur and then Gaussian Blur. Increase the Radius slightly and click OK. Then save the image as the displacement image in the Photoshop (.psd) format.

More Options
You can add a layer mask to hide the effect on certain areas of the image. For example, you could add a layer mask and paint with black over the rock climber to make the sign appear to be painted on the rocky surface only, and behind the rock climber.

The Displace filter applies the displacement map to wrap one image precisely over the other, forcing the top layer to reflect the contours of the base layer. Other Photoshop filters such as Conté Crayon, Glass, Lighting Effects, and Texturizer also load other images or textures to produce their effects. However, not all these filters load the second image in the same way. The Displace filter specifically distorts an image based on the different values of gray in the displacement map image. The greater the contrast in the gray values, the more texture appears in the blended image.

This technique works best if both original images are the same size and resolution. You can start by clicking Image and selecting Image Size to resize the two photos to match. If the images are not the same size, the Displace filter either resizes or tiles the map, depending on the settings you select in the Displace dialog box. Stretch to Fit resizes the map, whereas the Tile option repeats the map, creating a pattern (see steps 16 and 17).

A dialog box appears.

19. Navigate to select the displacement image you saved earlier.
20. Click Open.

The image is distorted.

21. Press Command+A (Ctrl+A) to select the entire image.
22. Press Command+C (Ctrl+C) to copy the image.
23. Click File.
24. Click Open Recent.
25. Click to select the image for the background again.

The background image opens.

26. Press Command+V (Ctrl+V) to paste the distorted image as a layer on top of the background image.
27. Click here and change the blending mode of the top layer to Multiply.
28. Click on the word Opacity and drag to the left to reduce the layer opacity to fit your image.

The top layer blends into the background layer, wrapping around the contours in the background image.

Important
Photoshop cannot recognize a displacement map image with layers. Be sure to flatten any image you plan to use as the displacement map before saving it as a Photoshop (.psd) file.

Try This
You can convert the photo to a black and white image using the Adjustments panel. Use the sliders to control the amount of dark and light areas for the contours of the displacement map. Flatten the image before saving it as the displacement Photoshop file.

More Options
You can apply a slight Gaussian Blur filter to the distorted layer to make it blend even more with the underlying background layer.