The key to a good result is in a good clean source image. The cleaner and better resolution the original source, the easier it will be to work with and the better it will end up. Take particular care to avoid images with large blown out white sections, as these will never look right in the final image. However, if you are having to “Restore” an old photograph, then chances are the original is not going to be in great conditions. For example, the original I’m using for this tutorial is a scan of an old image from a great woman I loved very much: My grandmother. And although I start this tutorial recommending to use a good resolution image, this is what I had to work with.

The nice thing about this method is the nature of adjustment layers themselves, you can always go back and change them, messing around with the colors as much as you want until it finally looks right. It also incorporates the layer mask right into the adjustment layer, so you can clean up your selection edges as you go along. It also doesn’t require any pre-selection of colors or blending of colors into one another.

Don’t forget to save early and often. Colorizing is time consuming, so it really hurts when you lose a lot of work.

See those low areas to the right and the left of the “mountain”? By bringing in the little arrows on the right and left (which represent light and dark values) towards the main mass, you will acheive a much better distributuion of values. It should look like this before you click ok:

Before and after levels:

You can also just use auto levels, but that won’t always give you the results you desire. By tweaking the levels by hand you can select just how you want your image to end up. You don’t have to put the markers exactly where I did, just play around with them until it looks right to you. The middle arrow is the mid tones, which can be adjusted as well.

After you’ve done all this, go up to image -> mode -> CMYK color. THIS IS IMPORTANT. It won’t work if you don’t do this, so don’t forget.

Now that you have your cleaned up image, it’s time to get to work. What you need to do now is select an area to color. Just pick one (hair, skin, background, etc.), it doesn’t really matter what order you do it in, you will get to everything eventually. For the purposes of this tutorial, I’ll start with the skin.

Using whatever selection tool you desire (I personally just use the polygonal lasso) select all of the skin in the image, making sure you subtract things like the eyes and mouth. If you have a Tablet this step is probably much quicker. Get it close, but don’t worry about getting it exactly exact, we will take care of the rough edges in a second.

Your selection will look something like this (over the whole body of course):

Now go into quickmask mode by hitting the circle-in-a-shaded-square icon in your toolbox (or just hit q). This will turn anything that you didn’t select pink, and your brush palette will turn to white and black. Now you can edit it just like any regular mask (white brushing reveals, black takes away). The first thing to do is get rid of the rough edges by applying a Gaussian blur to the quickmask (usually around 5 pixels, but play around). You might want to apply some selective gaussian blurring to areas where the skin mixes with another element such as hair, to give it more of a fade instead of a harsh line. Then go around with your brush tool fixing any overlaps (the only thing that should not be pink is the skin).

It should look like this:

Hit q again and it will become a selection again (but smoother and with some feathering). You can choose to just select the entire thing in quickmask mode, but I find it faster to do it this way. It’s a good idea to save this selection as a channel, in case you need it for something later. Leave the selection up.

Now for the coloring…
Now that you have your skin all selected, and your in CMYK mode (you are in CMYK mode right?), it’s time to color.

Make sure your original layer is selected (it should be the only layer right now) and your skin selection is still up, and then go up to

Menu -> Layer -> New Adjustment Layer -> Curves

Name the Adjustment Layer “Skin” and click “group with previous” (On certain versions of PS)

This will bring up the curves dialog box, and it will add a layer to your layers palette:

This is where all the magic happens. As I mentioned before, since this is an adjustment layer, you can always go back and edit it by simply double clicking on the curves icon in your layer palette. The black and white image to the left of the curves icon is your mask layer, which can also be edited (if you need to reveal more or less skin for some reason).

By adjusting each color curve individually, you will add color to your selected area. I found that I almost didn’t have to mess around with the black color, unless I intended to adjust the contrast a little. Now you can memorize exactly which values of curves give you what color, or you can just play around and eyeball it (what I do). Raising the curve up and to the left gives you more of a color, and down and to the right gives you less. You can also add points to the curves, and tweak the highlight and darks to be different hues, but for now I’ll just keep it simple, with one point curves.

This is what my curves looked like after messing around and eyeballing the skin tone:

You can also adjust the Black levels the same way if you want your shadows to be darker, and the combined CMYK curve will adjust the brightness and darkness of the entire range.

Click OK, and after doing several objects (like background) your image should look like this:

Now your task is clear, the same technique is used for every other object in the picture (with different curves of course). So I’ll just quickly run through the rest.
I found it useful to do the background next. Same technique, select, quickmask, blur, edit, reselect.

Once again, Layers -> New Adjustment Layer -> Curves

But after having the Skin and the Background selections saved, you can play around with
Load selection-> Add to Selection (or Subtract from selection) and you will find that the hair of the dress will be automatically selected for you. All you will need to do is retouch the edges a little bit with the brush. This extra step, is not necessary, and if you find it confusing then just ignore it and read what’s next:

Next step is hair. New Adjustment layer, etc. It looked like black hair would work the best based on the original, and as I remember, my grandmother used to color her hair black when she young. Back then I wasn’t even born and my dad was perhaps a young boy. But my dark-blonde grandmother liked her hair black for sure, so I went with that. Some small tweaks to cyan and CMYK to compensate for the flash she had on the left-top side of her hair and the background, raised the black a little. I have no formula for colors, just keep messing around until it looks good. And remember you can always go back and edit it later.

A key point with hair: When you have whispy hair that partially covers skin or background or whatever, you will want to go to your mask layers and use a the brush tool to work with the layers until you have no overlap. You can also selectively blur, smudge, and use greytones in the mask. You want to avoid color overlap, because it creates an obvious line of color across a section of your image and makes it look bad.

A note about eyebrows: If they have black eyebrows, you can just color skin tone right over it, otherwise, color it the same as the hair and make sure you have no skin tone/hair color overlap.

Finishing up coloring all the main objects, same technique of course. Always add a new adjustment layer for each item.

Eyes: Try not to over-saturate the eyes. In this example, I tried my best to match the beautiful grey-bluewish eyes of grandma and my dad. Look at some reference pictures when deciding on colors.

Lips: You can make them look like they have lipstick or not depending on the amount of colors, overall brightness, etc. If they have teeth, don’t just leave them black and white, give it a light cream color.

Clothing: In my particular picture I had no idea what color it was, so I went for dark red with contrasting flowers. It’s usually a good idea to raise the black levels up when doing clothing, or any black area just become a darker tint of whatever color you make the rest of the clothing.

For this image, I added two new (regular) layers and put them on top of the original. One I set to overlay mode, and painted in some pink/red highlights on the cheeks, bridge of the nose, chin, and forehead, then lowered the opacity until it looked good. I also added a small white gloss layer to the lips.

Your image is now fully colorized. If any colors look off, simply go back into the curves and change them. I would suggest leaving it for a couple hours, and then coming back to it for some more editing. It’s amazing how your perception can change once you haven’t been staring at it for a while. It’s also good to get some outside opinions.
This may seem complicated, but it’s really not. All it boils down to is selecting a part of the image, moving some curves around until you get a color you like, and repeating. It’s all about trial and error, everything in your .psd can be edited if you don’t like how it turned out, tweak a color here, add some yellow there, it all just boils down to your eye for color.