: Photoshop Smart Objects PSB instead of JPG When I drag or drop photos into Photoshop, or add them via the File > Place command, they are created as smart objects but the embedded asset is

@Moriarity648

Placing a jpeg will result in a jpeg as a smart object - there's no way around that, other than not placing a jpeg. A jpeg has no support for layers, even when it is a smart object. (I like to call this a Not-So-Smart Object).

If you attempt to add something like an adjustment layer inside the smart object, Photoshop will prompt you to save it when closing the image. Try it yourself. However, when you close the jpeg, it won't update with the newly saved file. This is yet another example of Photoshop again not being very smart at all, more like a dumb computer program.

There are many methods that could be used to avoid that nonsense, which others have touched on here, but here's another simple method.

Open the jpeg using File > Open, then Ctrl/Cmd+A to select all, then copy Ctrl/Cmd+C). Then in your other document hit paste (Ctrl/Cmd+V). Then right click the layer and convert it to a smart object. Now it will be a PSB!

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@Sherry646

You could always open your JPG first, then save it out as a PSB (File > Save As > Large Document Format *.psb)...

Then rather than placing the JPG place the resulting PSB instead.

I have to say though: A JPG as a Smart Object can already be edited non-destructively... so I don't really see what your issue is.

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@Eichhorn212

If you placed a JPG file, then the smart object is a JPG file.
PSB is only used when the smart object contain layers.

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