On the Layers palette, click the name of the layer.
Do one of the following:
Drag the Opacity
slider 
to the desired percentage.
Double-click the layer name to display the Layer Properties dialog, change the Opacity setting, and click OK.
To create interesting effects, vary the opacity of a layer from the default of 100 percent (fully opaque) down to 0 percent (transparent). When a layer is partially transparent, layers below it show through.
To change the opacity of all layers within a group, set the opacity of the group layer.
The Opacity setting of the Layers palette displays the opacity of each layer. The overall opacity of a layer and the opacity of individual pixels are independent of each other. For example, if a pixel starts at 50% opacity and the layer is set to 50% opacity, the pixel will appear 25% opaque. If the layer is in a layer group that is set to 50% opacity, then the pixel opacity will be 12.5 % opaque.
To set the opacity of a layer or layer group:
On the Layers palette, click the name of the layer.
Do one of the following:
Drag the Opacity
slider to the desired percentage.
Double-click the layer name to display the Layer Properties dialog, change the Opacity setting, and click OK.
Changing the Opacity of Layers
Cleaning up the Edges of Layers Created from Selections