Step 1: Open up the two images you want to blend together. The images I am using are from blakelivelyweb.com.

Step 2: You need to create a new blank image. To do this go to file > new and a little pop up screen should appear.

Add the sizes you need for this blank image (it must be big enough to fit both of your chosen images on!). Then press OK.

Step 3: Now, on this blank image you need to create a new raster layer. Go to layers > new raster layer.

Press Ok.

You’ll notice you have two layers on this blank image now like below.

Step 4: Next, you need to copy the first of your chosen images (you want to blend) & paste it as a new selection on your blank image.

Reposition the image to where you want it.

Step 5: After, you need to create another raster layer on the blank image following the steps from earlier. You’ll now notice you have three layers like below.

Now you need to copy & paste your second chosen image and paste it as a selection on the layer you just created. You need to position this image so that it overlaps the first image a little like so…

Step 6: Now (still using the selection tool) you need to change the Feather (i’ve highlighted in blue) to a number around 40…

And then select a strip of your second image like so…

Once this is selected you’ll notice the selected area will expand automatically. Now press delete.

You can keep pressing delete until your images a completely blended.

Step 7: Now you need to change the ‘feather’ back to 0.

And now you need to go to layers > merge > merge down… so that both your blend layers are merged together like below.

Step 8: Next, using the selection tool again, you need to select part of the blended image you actually want to use like so…

Finally, copy & paste this as a new image… and then save your file!

VOILA, you have a blended image.

(Source: mynameisflicktutorials)