When you set up a Photomerge composition, you identify your source files, and the panorama is automatically assembled. After the panorama is assembled, you can fine‑tune the placement of the individual photos, if necessary.
Choose File > Automate > Photomerge.
Or, click Add Open Files to use images you have open in Photoshop as your source files for the Photomerge.
Photoshop creates one multi‑layer image from the source images, adding layer masks as needed to create optimal blending where the images overlap. You can edit the layer masks or add adjustment layers to further fine tune the different areas of the panorama.