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Smart Objects
A Smart Object is an embedded file that appears in its own layer in Photoshop. A Smart Object layer is distinguished by an icon that overlays the thumbnail image displayed in the Layers palette, as shown in the example below.
Smart Objects are different from other layers because they are linked to a source file (e.g., an Illustrator file, JPEG, GIF or other Photoshop file). If you make changes to the source file, the Smart Object layer will also be updated with those changes.


Raster layer vs Smart Object layer
In contrast, raster layers (or regular layers) are fully editable, so you can draw and paint on them, fill them with colors, or erase pixels. Unlike Smart Objects, where you retain image quality, if you resize a raster layer smaller, you will lose information.
This is demonstrated in the example on the next page, which shows the result of a Smart Object that has been decreased in size, then resized back to its original dimensions. The same steps, when applied to a raster layer, produce an image that is blurred and of lower quality.


The difference in image quality when resizing a Smart Object compared to a raster layer
Because Smart Objects are linked to an outside document, you can resize them without losing the original image data. While you can apply layer effects and some transformations to Smart Object layers, you cannot actually manipulate (paint, draw, erase) their pixels because they are not editable from external documents. You can open the original source file for editing by double-clicking on the Smart Object icon

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