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I recently discovered something that I previous thought was impossible: PNG-8 files can store Alpha Transparency in the same way as PNG-32 files can. Not Indexed Transparency (like GIFs), but full on Alpha Transparency.

(You can learn more about this here: http://blogs.sitepoint.com/png8-the-clear-winner)

Apparently it's possible to do this using Fireworks, but I can't find a way to do it using Photoshop.

Does anyone know a way of enabling this incredible feature in Photoshop? Through add-ons or by any other means? It's so incredibly useful for web developers that I can't believe it's not been included in the latest version (or any version) of PS!

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Photoshop and PNG-8 hate each other. Just thought you should know. – Ignacio Vazquez-Abrams May 17 '11 at 21:00
@Ignacio: lol :) – Mehrdad May 21 '11 at 7:41
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You can use Ethan Gardner's pngquant script to convert a photoshop file to alpha-tx PNG. It works on Mac and PC. http://www.ethangardner.com/articles/alpha-transparency-in-png-8-images-without-using-fireworks/

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This may be the best option available today. Such a shame, but thanks. – Johnny W Oct 3 '11 at 0:31
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go to file > save for web and device

look at right side there is a drop down after Preset you'll find there PNG 8 there are some option related to transparency,just check them out.

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Yes. Those options are for indexed transparency. My question was about alpha transparency. – Johnny W May 23 '11 at 0:09
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