How to Make Carved Text in Photoshop
Ever wondered how to make your text look like it's carved? Well, here is a short tutorial on how it is done using Photoshop CS. We use this technique when preparing the free designs for customers house signs.
1.Start with plain type on a dark surface

2. Select the text and border (the area to be carved and gilded) using the magic wand tool. Make a new layer from the selection using Layer>New>Layer via Copy.
3. In the layers palette, double click on the new layer to open it. Click on the "Bevel and Emboss" button.
4. Change the settings as follows:

Here are the setting you need:
- Style: Inner Bevel
- Technique: Chisel Hard
- Depth: 281px
- Direction: Down
- Size: 250px
- Soften: 0px
- Angle: 120 degrees
- Altitude: 30 degrees
- Highlight mode: Normal, Opacity: 100%, Colour: #FFFFFF
- Shadow mode: Normal, Opacity: 100%, Colour: #4E500A
5. Click "Colour Overlay" and set the colour to "#CC9900".
6. Click "OK" and you should have a carved and gilded sign. You may have to fiddle with the colours to make it look right on your PC. Here is what you should be left with:

Hopefully this works for you.
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