Switch to the Clip Editor if you are not there already.


Scroll down until you find a brown bar. (It should be titled "Overlay")

If, for whatever reason, the brown bar doesn't exist, go the "Add Overlay Track" section to learn how to get it and come back.

Right click on the Overlay bar and select "Add Clip to Track".

Note: Your overlay will appear where your playhead is so make sure you consider that before applying and overlay.

Select "Material Overlay Effect" and click OK.


A maroon-colored bar labeled "New Clip" should appear where your play head is.


Right click on the "New Clip" bar and select "Show in Element Viewer".

WARNING: The Element Viewer is a powerful tool without many safeguards. Using it incorrectly can corrupt your map irretrievably and can crash SFM. Just follow the step and you'll be fine.

Next to the "material" field, click the browse button ().


Find the location of the overlay you want to apply, select it, and click Open.

In this tutorial, I will using my own YouTube Banner Overlay as an example.

If your overlay is supposed to be transparent and it's not (like the one below), just follow these steps.


Next to the "overlaycolor" field, click on the white box.


Go to bottom of the new window and change the transparency to be 254 or lower.


There you go. You made your overlay transparent.


TRICK: You could even change the transparency for overlays without transparent parts to get things like the image below.

If, for some reason, you do not have the "Overlay" bar, follow these steps to get it.

Scroll down to any track (that's what it's called) other than the "Picture" channel.

Right click in the blank space on the other channel, go to "Add Track", and select "Effects".


Name your track whatever you want (It doesn't have to be "Overlay") and click OK.


You now have the "Overlay" bar. Go back to step 3 in the "Tutorial" section to know how to apply the overlay.

The overlay will appear where the maroon-colored bar is. You could drag the ends of the bar to adjust the length of its appearance.

If you want to know how to create your own overlay, check out this guide by YoshiPoland.
https://psteamcommunity.yuanyoumao.com/sharedfiles/filedetails/?id=714375867&searchtext=overlay