To apply text to surfaces in Photoshop, you are going to need Adobe Photoshop CS2 or later, some knowledge of Photoshop’s layout, and a couple of images (which are linked below).
Links to the images:
Once the images are downloaded, we begin by opening Photoshop and selecting one of the images. Go to File>Open>Downloads. Select any image you like, but for this tutorial, I will be using the red fabric.
After opening the file, look to the right and double-click on the layer that says Background. Once the menu box opens, hit OK. From there, we will select Channels and choose the image with the best contrast possible. I will select Green for this image.
From there, we will save that selection as a psd. file and come back to it later. Go back to the original image and add a new layer.
With the new layer still selected, we will use the Horizontal Type Tool and add text to our image. You can place the text wherever you like. Due to the color of the image, I chose to use a white font. Afterwards, click on the layer with the text and select Rasterize Type.
Now for the fun part! Go to the upper menu bar and select Filter>Distort>Displace. A menu box will pop-up, but you can just hit OK. Now we select the .psd file that was saved earlier. The image should look something like this:
Next, select the layer with the text and play around with blending modes. For this one, I used Overlay. To have a smoother blend, play around with the opacity. Finally, the image looks like this. Remember the blending of the text depends on the material, so experiment and have fun!