When making custom textures, you may find that there is this weird white outline with some images. It looks messy and can be a pain to remove. I made this guide mostly so that I could return to this in the future if I needed to, so the instructions may be brief and I may not be able to help in every single scenario, but hopefully you find this helpful.

Original:


After:


Programs that you will need:

• Photoshop (I am using Photoshop CC 2014, but other plugins can be found to do the same thing)
  
• VTFEdit

In addition to this, you will need the "Flaming Pear" plugin pack for Photoshop. This can be found here: http://flamingpear.com/free-trials.html#freebies

Download the "Free Plug-ins" pack, which contains the "Solidify A/B/C" filters which we will use later on.

Our first step is taking our image and creating an alpha mask for our image.

Before starting, I recommend you create a backup of your image, as if you flatten your layers, you won't be able to undo this and change it later on. Copy your .psd / other file format and rename it to something like image-backup.psd.


Firstly, you will need to flatten your image so that everything is in one layer. This can be done by selecting all the layers and going to Layer > Merge Layers.

Secondly, hold down Ctrl and click the layer preview. This will select all of the image content.


Go over to layers and select the "Channel" tab.

Then, press "Save selection as channel." This will then create an alpha channel, which will appear black and white.

That's it! We can then move onto the next step.

Once we have our alpha channel, we can then using the Flaming Pear plugin to solidify the background.

We can now deselect our image (use CTRL+D or just click somewhere on the image). Then, go back into the layers tab and select our layer.

We can now go into Filter > Flaming Pear > Solidify B.


After you have done this, you will see that your image has this strange bleeding effect. This is exactly what we want.


Now, we just need to save the file as a .tga (as it has support for alpha) When saving, ensure that the saving process is using 32bit / pixel. Without this, the alpha channel will not save and the image will not work as hoped.


Once we have done this, we will then need to import the image into VTFEdit.

Once we have our .tga file, we can then import it into VTFEdit as usual (File > Import > select TGA).

We can then use these settings to import the image:


We can then save the VTF into your materials folder. Lastly, we just need to add the translucent line into the VMT so the game knows the file contains translucent textures.


This is the line that you can copy into the VMT:
"$translucent" "1"

And that's it! Reload your map and it should work.

Apologies for the brief guide, but hopefully it helps, thanks for reading!