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It's an option in InDesign, CSS, and MS Word. I'm not finding it in Photoshop CS5.

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Photoshop has no automated drop cap feature. You will have to create two separate text elements and "fake" the drop cap.

In reality, Photoshop is not designed to be a type-intensive application. If it were, it would at least have a glyphs panel.

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I take minor issue with "fake drop cap": in PS, you are manually creating something which has been automated in the other programs. The easiest way (the 2 element way mention by scott) is to create the body text sans the first Letter, with a first line indent large enough for the size of the desired dropped cap. Limit yourself to a size which only forces a runaround of one line. – horatio May 15 '12 at 16:44
"Fake" was placed in quotes because one would be creating manually what other apps do automatically. I realize the drop cap technique has been around long before even Gutenberg. :) – Scott Oct 7 '13 at 22:33

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