Cut a Picture into a Shape with Photoshop or Elements

A clipping mask is an easy, nondestructive way to cut a picture into any shape in both Photoshop and Photoshop Elements. I'm using a custom shape to demonstrate the technique in this tutorial, but it will work the same with text or any layer content with transparent areas. This tutorial is written for Photoshop and Photoshop Elements. Where there are differences in versions, I have explained them in the instructions.

What About the Cookie Cutter Tool?
The cookie cutter tool in Photoshop Elements is a quick and easy way to cut a picture into a shape. The cookie cutter tool requires no instruction, but by using a clipping mask you have more flexibility and it's not limited to what shapes you have installed in Photoshop Elements.