Photoshop's Warp Text tool allows you to wrap or bend text around an object in your image to make attention-grabbing, personalized banners or headlines. You can also warp text in both horizontal and/or vertical directions to give your text an individual look and feel.
Photoshop has many means by which to manipulate text, but this will provide a starting point that will especially come in handy if you have not had the chance to use these text features before.
First, open an image to which you want to add text. Choose the horizontal text tool from the toolbar and click the image near to where you want to position your text. Type in the text you would like to add. You can also add the more traditional style enhancements such as bold, italics or underline to your text while in text mode.
When you are done adding your text, select and right-click this text to open the contextual menu. To open the Warp Text dialogue box, choose Warp Text. From this box, you can choose from a selection of pre-defined text warps using the Style pull-down menu. Select the warp that best fits the effect you're trying to accomplish. If you're undecided on the kind of warp you want, try some out to see what effect they have on your image text.
There will be several sliders under the Style pull-down that will allow you to make fine-tuning adjustments to the warp effects. You can change the horizontal and vertical distortion and the text bend here. An option to using the sliders is to enter a percentage value for these properties. Once you have reached the effect desired, simple click OK and the Warp Text effect will be applied to your image.