Starting Off
First off let me give you a brief explanation of layer styles. Layer styles can be applied to almost any layer in photoshop as long as it can be “seen” by photoshop. Layers that are clear or masks or adjustment layers can’t be styled with layer styles. For this tutorial I will be using a text layer to show you how layer styles work, but remember that they can be used on objects, shapes, and other layers as well. To get to the layer styles window, select the layer you want to style and click the button that looks like the letters “fx” on the bottom of the layers window, and then click on blending options. You can also right click on your layer in the photoshop window and select blending options from there as well.

Drop Shadow
The first sytle is the drop shadow. This can be used to give your layer the appearance of having light cast on it to create a shadow. It is fully customizable like all of the other styles so that you can change the angle, opacity, distance, and size of the shadow, as well as the color.

Here is an example of the default drop shadow settings on some black text.

Inner Shadow
The inner shadow style is similar to the drop shadow, but instead of outside the text, it is inside the text. This can be used to give your text the appearance of being “sunk in” to your background. The options for this one are identical to the drop shadow style, and can be customized in the same way.

Here is an inner shadow applied to white text on a black background.

Outer Glow
The outer glow layer style can be used to give your text a sort of “aura” look. This style can be used to make a very small glow, or a very large glow that can take up the majority of your document. The color and opacity can also be changed to whatever you please.

Here is a blue outer glow applied to a white text.

Inner glow
The inner glow is again, identical to the outer glow, but used on the inside of the text and is also fully customizable. There is one small addition to this effect as well. You are given the option to apply the glow at the edge of the layer, or in the center of the layer, giving two different effects.

Here is a purple inner glow applied to the EDGE of the layer.

And here is a purple inner glow applied to the CENTER of the layer.

Bevel and Emboss
Bevel and emboss is one of the “overused by ameteurs” layer styles, but when used properly it can produce beautiful and dramatic effects. Bevel and Emboss basically gives your text a 3D look like it has been chiseled from stone. You can infinitely change the look of this style to range your layer from looking like it is made of sharp old granite, to extremely smooth glass or water.

This is a bevel and emboss default applied to white text.

You can also change the type of bevel in the contour window. This can change the edge of the bevel from extremely smooth and rounded, to sharp and pointy. And it can also make double or triple incisions in the layer as well.

This is a rounded bevel applied to the same text as above.

The last feature of the bevel and emboss style is the ability to lay a texture over your text to give it a more drastic look. You can import textures that you find online or make yourself and use them in the texture window. There is no limit to what you can do with this style.

Here is the standard photoshop “bubble” texture applied to my white text.

Satin
The satin layer style applies a darkening style to your layer and is often used when trying to create a gel or plastic looking text as it mimics unordinary light and shadow effects over your layer.

The default satin style applied to white text.

Color Overlay
A very simple style. Just casts a solid color over your selected layer. Fully customizable color and opacity wise.

Teal color overlay applied to white text.

Gradient Overlay
The gradient overlay is similar to color overlay except that it uses (you guessed it) a gradient. You can select or create any gradient you please, the type of gradient (linear, spherical, etc.) and the angle of the gradient as well.

A simple black to white gradient with an opacity of 60% applied to white text.

Pattern Overlay
The pattern overlay style can be used to place any repeating pattern or texture over your layer. This can be used with any premade or custom pattern. Keep in mind that you are not limited to only solid patterns, you can also apply translucent patterns such as black stripes on a clear background.

Standard bubble pattern overlay on white text.

Stroke
Lastly is the stroke style. This is used to make a solid outline inside or outside of your layer. You can choose any color and opacity for this style, and you are not limited to just solid colors, you can also use gradients, which I will show you below.

Standard stroke applied to white text.

To apply a gradient stroke, select the drop down box that says “fill type” and select gradient. From here you can select or make a new gradient and choose the gradient style, angle, and opacity.

Here is a pink to red to blue gradient stroke on white text.

In conclusion
Layer styles are incredibly easy to use, and when you get the hang of using them in conjunction with eachother, you can create spectacular effects on shapes and text. I cannot stress how important experimentation is to your learning in photoshop. So play around for an hour or two when you have time and learn to use these styles. Your time will not be wasted and you will pick up a great technique to use in future works.
End Result
Here is what I came up with after 2 minutes of toying around with layer styles

Questions?
Leave a comment. I always answer.
A really good tutorial covering the basics. Thanks for that.
Thank you for this nice tutorial. I have played a bit with styles but cannot figure out how to create a clear style over a pattern. I would then apply styles to the clear layer to make it look raised,like a button with a curved glass top. I hope that is a good description! Thanks for any direction you may provide!
But I get to see my grandson next weekend, so that makes everything ok! ,