Step 1: Make a splash.

Type a letter or word — heavy sans-serif fonts set to a light color work well for this effect. I used Cubano Regular from Adobe Fonts and set it to 140 points. Choose Layer > Smart Objects > Convert to Smart Object so you can apply layer styles and effects to it.

Step 2: Add depth.

Click the fx button at the bottom of the Layers panel (Window > Layers) and choose Bevel & Emboss. Adjust the settings (especially Depth and Highlight Opacity) so the letters appear to lift from the page. Keep the Layer Style dialog box open for the next step.

Step 3: Mark the splash zone.

Add a “lip” to the bevel; this will become the splash in the next step. Click the Contour label, choose a shape from the drop-down menu, and then click the thumbnail to customize the effect. Drag points on the curve to change its shape, or click any point that’s unnecessary and press the Delete key to remove it. Click OK twice to close the Contour Editor and Layer Styles dialog boxes.

Step 4: Let it flow.

Now you can add a watery look to the edges of the type. Choose Filter > Distort > Ripple and experiment with the settings until you get the effect you like. The size of the typeface will affect the splash size. Try setting negative percentages to see some interesting results. Click OK to apply the changes to the type layer.

Step 5: Throw some water on it.

Apply different images to the type and see what results you get. Find some photographs of water in your own collection, or else open the Libraries panel (Window > Libraries) and locate the Splash Type library that you added. Drag a photo over your word to create a new layer above the type.

Right-click the photo layer and choose Create Clipping Mask to fill the type with the photo. Chances are, the photo will appear within only some of the letters. With the photo layer selected, use the Transform tools (Edit > Transform) to resize, rotate, stretch, or scale the photo so it fills the word to your liking.