Each layer style has its own blending mode, which determines how it interacts with underlying layers. The underlying layer in this context may or may not include the layer to which the layer style is applied. For example, a drop shadow does not blend with the layer to which it’s applied, because the shadow falls behind the layer; whereas an inner shadow does blend with the layer to which it’s applied.

Layer styles can be categorized as interior layer styles or exterior layer styles. Interior layer styles affect the opaque pixels of the layer to which they’re applied. These include Inner Glow, Inner Shadow, Color Overlay, Gradient Overlay, Satin, and Bevel And Emboss. Exterior layer styles do not blend with the pixels of the layer to which they’re applied, but only interact with the underlying layers. These include Outer Glow and Drop Shadow.

If Blend Interior Styles As Group is set to On, interior layer styles use the blending mode of the layer.

If you modify a layer’s Opacity property, the opacity of the layer’s contents and the opacity of the layer styles are all affected. If, however, you modify the Fill Opacity property in the Blending Options property group, the opacity of the layer styles is unaffected. For example, if a text layer has the Drop Shadow layer style applied, decreasing the Fill Opacity to 0 makes the text disappear, but the drop shadow remains visible.

Use the Blend Ranges From Source option to use the advanced blending options set for the Photoshop file that determine what blending operations to perform based on the color characteristics of the input layer.