Photoshop Tutorials: Blend Photos Like A Hollywood Movie Poster
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Step 3: Add A Layer Mask
Once you've resized and/or repositioned your photos in the document the way you like them, we can begin blending them together. The first thing we need is a layer mask, and we're going to add it to the layer on top ("Layer 1"), which is my case is the layer containing the beach photo, so I'm going to click on that layer in the Layers palette to select it. Then, click on the Add A Layer Mask icon at the bottom of the Layers palette:
We can now see the layer mask thumbnail added to the top layer:
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Notice that the layer mask thumbnail has a white highlight border around it. That's telling us that the layer mask, not the layer itself, is currently selected, which is what we want.
Step 4: Drag Out A Black to White Gradient On The Mask To Blend The Two Images
Select your Gradient tool from the Tools palette, or press G to quickly access it with the keyboard shortcut:

Then, up in the Options Bar at the top of the screen, click on the down-pointing arrow to the right of the gradient preview area, which will bring up the Gradient Picker. Click on the black to white gradient in the top row, third from the left to select it:

Click anywhere else on the screen to close out of the Gradient Picker once you've selected the gradient. Then, back in your document, hold down your Shift key and drag out a black to white gradient to blend the two images together. Because you're dragging the gradient on the layer mask, not the layer itself, you won't see your gradient. Instead, you'll see the two images blend together. Start at the top of where you want the transition from one image to the other to begin, which in my case is the top of the beach photo, and drag down to the point where you want the transition to end. I want my transition to end where the water and land meet, so I'm going to click just below the top of my beach photo and drag straight down to just above the water line:

Release your mouse button, and the two images blend together at the location where you dragged out the gradient:

If you're not happy with how your two images have blended together, simply press Ctrl+Z (Win) / Command+Z Mac to undo and try dragging the gradient again.