Indexed Color mode

This mode uses at most 256 colors. When converting to indexed color, Photoshop builds a color lookup table (CLUT), which stores and indexes the colors in the image. If a color in the original image does not appear in the table, the program chooses the closest one or simulates the color using available colors.

By limiting the palette of colors, indexed color can reduce file size while maintaining visual quality--for example, for a multimedia animation application or a Web page. Limited editing is available in this mode. For extensive editing you should convert temporarily to RGB mode. (See Converting to indexed color (Photoshop).)