To make a Transparent GIF, you will need to select a color to serve as the "transparency color". You should only choose a color which does not exist in any other portion of the image you are using, as this would cause the undesirable effect of making transparent spots throughout your image where they don't belong.
If you are making your image from scratch, it is best to always make a new layer before beginning, thus leaving yourself free to adjust the background color at a later time.
1.Open or create the image you wish to add transparency to. Now, use the Eye Dropper tool to select the color from your image which will be used for the transparency (do this by right clicking on the portion of your image where the particular color is located).
2.
Now, press CRTL+A to select all and then choose Selections »Modify »Transparent Color and set it to Background color and Tolerance 0.
3.
Now go to Color »Decrease Color Depth »256 Colors and use the settings below:
1) Optimized Median Cut
2) Nearest Color
and click OK.
4.
Next, go to Colors »Set Palette Transparency... see below and click ok (if you want to test the transparency, click the proof button).
5.
Next, go to the File »Save As menu and select CompuServe Graphics Interchange (*.gif) from the list and then click on the Options button. Here you can choose to use an interlaced or noninterlaced image. Interlaced images will have a blurry pixelated look while loading (the example below is interlaced). Choose one or the other as well as Version 89a and click ok. Click save and you should be done!
