In this tutorial we’ll create Rounded Corners text effect, with this tutorial you can make rounded corners for any type of shapes:
1. Start by making a new file with the Width=1024 and Height= 768.
2. Select a square font, I used Arial Black with a size of 400 and write your text, I will write AND.
3. Go to Layer->Rasterize->Type.
4. Select the text layer, then Ctrl+Click on the layer thumbnail to select the text contour.

5. To add a layer mask Go to Layer->Layer Mask->Reveal Selection, pres Ctrl+D to deselect.
6. Select the layer mask by clicking on the layer mask thumbnail.

7. Go to Filter->Blur->Gaussian Blur and enter a radius of 10, then pres Ctrl+F two times to repeat the filter.
8. Go to Image->Adjustments->Levels and use the settings from below:

The final result should be like the one bellow:

This is a great tutorial, thanks so much for sharing!
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Faster, easier way to do this:
Ctrl + click on the text, go to Select > Refine Edge, raise the Smooth and Contrast levels to the desired roundness and anti-aliasing, then make a new layer and fill the selection.
This also rounds the inside of the text.
Great tip BlobFish.
Very Nice!!
Tanks
that’s great, and really easy to understand… hope you do more of these!That was very helpful! thank you for this tutorial!
Nice tutorial !!!
Thanks.