Step 1: Duplicate The Background Layer
With the photo newly opened in Photoshop, if we look in the Layers panel, we see that we currently have one layer - the Background layer - which is the layer our image is sitting on:
Click on the Background layer and, with your mouse button held down, drag the layer down onto the New Layer icon at the bottom of the Layers panel (it's the icon directly to the left of the Trash Bin):
Release your mouse button when the hand cursor is over the New Layer icon. This makes a copy of the Background layer which Photoshop places above the original:
Step 2: Add A New Blank Layer Between The Two Existing Layers
Hold down your Ctrl (Win) / Command (Mac) key and click on the New Layer icon at the bottom of the Layers panel (the same icon we used in the previous step):
This adds a new blank layer to the document. Normally, Photoshop places new layers above the layer that's currently selected (which in our case was the Background copy layer), but by holding down the Ctrl (Win) / Command (Mac) key while clicking the New Layer icon, we told Photoshop to place the new layer below it instead. We can see in the Layers panel that we now have a new blank layer named Layer 1 sitting between the Background and Background copy layers:
Step 3: Fill The New Layer With Black
Let's fill the new layer with black which will become the background color for the effect. Go up to the Edit menu in the Menu Bar along the top of the screen and choose Fill:
This opens Photoshop's Fill dialog box. Change the Use option at the top of the dialog box to Black:
Click OK when you're done to close out of the dialog box. Nothing will seem to have happened in the document window because the image on the Background copy layer is currently blocking Layer 1 from view, but we can see in Layer 1's preview thumbnail in the Layers panel that we've filled the layer with solid black:
Step 4: Select The Background Copy Layer
Click on the Background copy layer in the Layers panel to select it and make it the active layer:
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Step 5: Apply The Mosaic Filter
Go up to the Filter menu at the top of the screen, choose Pixelate, then choose Mosaic:
The Mosaic filter pixelates an image by turning it into a series of solid-colored squares. We can set the size of the squares using the Cell Size option at the bottom of the filter's dialog box. Larger values will create larger squares. Smaller values, smaller squares. These squares will eventually become our colored dots, so you'll want to set your Cell Size value based on the number and size of the colored dots you want in your final effect. This may take a bit of trial and error to get things right. I'm going to set my Cell Size value to 20. Make sure you remember the exact value you used because we'll need it again in a moment:
Click OK to close out of the dialog box. Your image should now look pixelated:
Step 6: Create A New Document
Let's set our image aside for a moment and create our repeating dot pattern. For that, we'll need a new Photoshop document, so go up to the File menu at the top of the screen and choose New:
This opens the New Document dialog box. Set both the Width and Height of the document to the same value you entered for the Cell Size option in the Mosaic filter's dialog box. In my case, I set my Cell Size to 20 so I'll set my Width and Height options to 20 pixels each. This will create a new document that's exactly the same size as the squares in our image. Don't worry about the Resolution value but make sure Background Contents is set to White:
Click OK when you're done to close out of the dialog box. Your new document will appear on your screen. Since your document is most likely very small, hold down Ctrl+spacebar (Win) / Command+spacebar (Mac) on your keyboard to temporary switch to Photoshop's Zoom Tool (your mouse cursor will change into a magnifying glass with a plus sign in the middle), then click a few times inside the document to zoom in on it. Here, I've zoomed in to 1600%:
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Step 7: Select The Elliptical Marquee Tool
Select the Elliptical Marquee Tool from the Tools panel. By default, it's hiding behind the Rectangular Marquee Tool, so click on the Rectangular Marquee Tool and hold your mouse button down for a second or two until a fly-out menu appears, then choose the Elliptical Marquee Tool from the list:
Step 8: Draw A Circular Selection
With the Elliptical Marquee Tool in hand, hold down your Shift key, click in the very top left corner of the document and, with your mouse button held down, drag diagonally down to the bottom right corner of the document to draw a circular selection outline. Holding the Shift key down as you drag will force the selection outline into a perfect circle. If you need to reposition the selection outline as you're drawing it, hold down your spacebar, drag the outline into position with your mouse, then release your spacebar and continue. When you're done, the edges of the selection outline should touch the edges of the document so it's the same width and height as the document itself:
Step 9: Fill The Selection With Black
Go back up to the Edit menu at the top of the screen and once again choose Fill, just as we did back in Step 3. The Use option should already be set to Black since that's what we changed it to last time, so simply click OK to close out of the Fill dialog box. Photoshop fills the selection outline in the document with black. Press Ctrl+D (Win) / Command+D (Mac) on your keyboard to quickly deselect the area and remove the selection outline.
If you're using Photoshop CS4 or CS5 and you've zoomed far into your document as I have, you'll see a grid outline (known as the pixel grid) appearing through the black circle. The pixel grid is a new feature as of CS4 and is simply a visual aid when you've zoomed into your document. It's not part of the image itself and will disappear when viewing the image at its actual size, so just ignore it. The grid will not appear if you're using Photoshop CS3 or earlier:
Step 10: Invert The Colors In The Document
Go up to the Image menu at the top of the screen, choose Adjustments, then choose Invert:
This inverts the colors in the document, making the black areas white and the white areas black:
Step 11: Define The Circle As A Pattern
Go up to the Edit menu at the top of the screen and choose Define Pattern:
Photoshop will pop open a dialog box asking us to name the new pattern. Give the pattern a descriptive name. I'm going to name mine "Circle 20x20" since the size of my document is 20 px by 20 px. You may end up creating more circle patterns, all at different sizes, so it's a good idea to include the size of the document in the name:
Click OK when you're done to close out of the dialog box. It won't seem like anything happened, but Photoshop has now saved the document as a pattern. You can close out of your circle document at this point since we no longer need it. There's no need to save it, so choose Don't Save when Photoshop asks if you want to save the document before closing it.
Step 12: Add A Layer Mask To The Background Copy Layer
Switch back over to your main document and make sure the Background copy layer is selected in the Layers panel. Click on the Add Layer Mask icon at the bottom of the Layers panel:
Again, nothing will seem to have happened in the document, but a white-filled layer mask thumbnail appears on the Background copy layer in the Layers panel, letting us know that we've added the layer mask. Notice that the thumbnail has a thin highlight border around it. This tells us that the layer mask itself is selected:
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Step 13: Fill The Layer Mask With The Circle Pattern
Once again go up to the Edit menu at the top of the screen and choose Fill. This time, change the Use option from Black to Pattern:
Click on the Custom Pattern preview thumbnail to select the pattern you want to use:
This opens the Pattern Picker. Choose the circle pattern we just created by clicking on its thumbnail. It should be the last thumbnail in the list. If you have Tool Tips enabled in Photoshop's Preferences, the name of the pattern will appear when you hover your mouse cursor over the thumbnail:
Click OK once you've selected your pattern to close out of the Fill dialog box. Photoshop fills the layer mask with the circle pattern, and our image is now made up of a pattern of colored dots:
I'll zoom in closer to the image so we can see the effect more easily. Each dot in the image is made up of a single solid color thanks to the Mosaic filter we applied earlier. The black area surrounding the circles is from Layer 1 below the image (which we filled with black back in Step 3):
Step 14: Add A Hue/Saturation Adjustment Layer (Optional)
As an optional final step, we can enhance the effect a little by increasing color saturation in the image. Click on the New Adjustment Layer icon at the bottom of the Layers panel:
Choose a Hue/Saturation adjustment layer from the list that appears:
If you're using Photoshop CS3 or earlier, a Hue/Saturation dialog box will pop open on the screen. For Photoshop CS4 and CS5 users, the controls for the Hue/Saturation adjustment layer will appear in the Adjustments panel. In either case, increase the color saturation in the image by clicking on the Saturation slider and dragging it towards the right. The further you drag to the right, the more saturated the colors will become. I'm going to increase my saturation to +20:
For Photoshop CS3 and earlier users, click OK to close out of the Hue/Saturation dialog box. Photoshop CS4 and CS5 users can leave the Adjustments panel open. And with that, we're done! Here, after boosting color saturation, is my final "photo to colored dots" result:
And there we have it!
