Choose/Draw an image that will become your photoshop custom shape
Select the Pen tool (view Pen settings)
Create your path
Select the Custom Shape library you will add to
Edit > Define Custom Shape
Save library
These steps do not vary, no matter which version of the program you are using. The video to the right was recorded using Version 7, but the steps are the same in the newest version CS4.
Step 1
If you are planning to make a set of Photoshop custom shapes, then start by creating a blank library. If you are only making a single form, you can skip this step.
Step 2
Photoshop Custom Shapes are simple to make, but only when they are simple in design. Take a look at your default shape-library. The default shapes are plain. They are made up of basic lines filled with color, with few or even no lines within the form. This tutorial will walk you through making Photoshop Custom Shapes for any version of Photoshop that you use. However, the more complicated the form you try to create, the more difficult this process will become.
Open Photoshop:
Step 3
Select the Pen Tool and set this tool to create a Path; then set the tool to “Exclude Overlapping Path Areas.” These settings are found just beneath the top menu (where File, Edit, Image, etc are found). View the image below for the correct settings.
Step 4
Create your path. Start by clicking on the edge of your image. With single clicks, follow around the outline of the image. At all times, make sure that your Pen tool either has nothing or an X beside it. If you see a + or – beside the tool, you are adding or removing points from the path.
To create a line within the path (such as the lines between the fingers of the heart hands in the example Photoshop Custom Shape) combine multiple paths with space inbetween. Depending on the image you have chosen, you may also need to follow the outline into the center of your Photoshop custom shape, then trace it back out, again keeping space between the lines of the path. Remember to watch the pen as well and avoid clicking when you see a + or – beside it.
If your form is particularly detailed, then creating the space inside the form is done best using a graphic tablet. The Bamboo FunTablet is our recommendation, for it is both inexpensive and reliable. Or, for a more expensive but higher quality tablet, you may want to look into the Intuos4.
When you have finished tracing around the outline of your image, close the path by clicking on the original starting point. A small circle will appear beside your pen tool, indicating the correct point, when you hover over it.
Step 5
If you would like your Photoshop custom shape to appear within a specific library, select that library before finishing step 6.
Define and Save:
Step 6
Select Edit from the Photoshop top menu, then click “Define Custom Shape.” This will bring up a box where you can name your new form. This name will appear within your library when you hold your mouse over the image thumbnail, helping you tell what the thumbnail is without selecting it and using it.
Once you have named the form, click Ok. That form will now appear within the library you selected during step 5.
Step 7
This is perhaps the most important step. Open your Photoshop custom shape library through the drop-down box and click on the small arrow beside the thumbnails. That will bring up the library menu. From this menu, select Save.
If you do not save your library after adding the new form, your Photoshop Custom Shape will be lost when you exit.
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Open Photoshop: 
