The Indent Options

Below the alignment and justification icons are three indent options - Indent Left Margin (top left), Indent Right Margin (top right), and Indent First Line (bottom left). All three are set to 0 pt by default:

These options allow us to add space between the entire paragraph and the left or right sides of the text box, or we can add space just to the first line of the paragraph. To change the value for any of the indent options, either click inside the input box and enter a value manually or, if you're using Photoshop CS or higher, move your mouse cursor over the option's icon to the left of the input box, which will turn your cursor into a scrubby slider, then click and hold your mouse button down and drag towards either the left or right. Dragging towards the right will increase the indent value while dragging towards the left will decrease it.

As an example, I'll increase my Indent Left Margin value to 16 pt:

And we can see that I now have a small amount of space between my paragraph and the left side of the text box:

If I select the Right Align Text option, then increase my Indent Right Margin value to 16 pt:

We see that I now have space between the paragraph and the right side of the text box:

I'll re-select the Left Align Text option in the top left corner of the Paragraph panel, then I'll increase my Indent First Line option to 24 pt:

This aligns the text to the left side of the text box and indents only the first line by 24 pt:

The Paragraph Spacing Options

Photoshop also gives us options for adding space either before or after a paragraph using the appropriately-named Add Space Before Paragraph (left) and Add Space After Paragraph (right) options:

Typically, we'd use one or the other, not both at once, and I usually use the Space Before option. Here's a text box containing three paragraphs of text which, at the moment, are not separated at all from each other:

I'll click and drag over the bottom two paragraphs to select them. I don't need to add any space above the first paragraph so there's no need to include it in the selection:

With my two paragraphs selected, I'll increase the Space Before value to 14 pt. You can either enter a value manually into the input boxes or use the scrubby sliders (Photoshop CS and higher):

This adds space above each of the two paragraphs I selected, making it easier to see where each paragraph begins and ends:

As we covered in the first tutorial in this series, Photoshop Type Essentials, to commit your changes and exit out of text editing mode, click on the checkmark in the Options Bar:

Or, if you have a numeric keypad on your keyboard, you can press the Enter key on the keypad. If you don't have a numeric keypad, you can press Ctrl+Enter (Win) / Command+Return (Mac) to accept the changes.

Hyphenate

The final option down at the bottom of the Paragraph panel is Hyphenate, which is enabled (checked) by default:

Hyphenation is especially helpful when using any of the justification options because it lets Photoshop break longer words up onto separate lines, making it easier to space the words out in a way that's more visually appealing. However, if you're not a fan of hyphenation or you just don't want to use it for a specific situation, simply uncheck the option to disable it.

Resetting The Paragraph Panel

Finally, if you've made changes to the Paragraph panel options and want to quickly reset them back to their defaults, click on the menu icon in the top right corner of the panel:

Then select Reset Paragraph from the menu of options that appears:

And there we have it! That's our look at the paragraph-based type options in the Paragraph panel in Photoshop! Be sure to check out the Character panel tutorial if you haven't done so already, as well as our Photoshop Type Essentials and Point Type vs Area Type tutorials!

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