Yes, it is a Photoshop file, and yes, there are layers. You have to open the GROUPS to see all the layers that live under them. One group is called "Magazine-Keep On Top", and the other is "Place Images Here" to indicated that is where you would put your images (in place of mine) for the whole thing to work. It is very simple. After you have edited all of your photos separately, open this psd file, delete my photos from the "Place Images Here" with two of your own images, adjust if needed. Save. I save all of my "page spreads" separately and then when I am done, merge them all to create one big PDF magazine document.