Create A Fun, Easy Gel Text Effect With Layer Styles
Free Adobe Photoshop Text Effects Tutorials At Photoshop Essentials.com
Step 9: Apply An "Inner Glow" Layer Style
Click directly on the words Inner Glow in the Layer Style menu on the left of the Layer Style dialog box, directly below "Outer Glow":

What are we going to do first? Yep, we're going to pick a color to use for the Inner Glow. Go ahead and click on the Inner Glow color swatch:

This brings up the Color Picker. This time, rather than clicking on the text color itself and then selecting a darker shade in the Color Picker, just click on one of the darker areas in the text. We'll use that color for the Inner Glow:

Click OK in the Color Picker to exit out of it once you've sampled your color.
We have our darker color selected, but by default, the blend mode for the Inner Shadow is set to "Screen", which means we're not going to see our darker color. Basically, we need to change the effect from an inner "glow" to an inner "shadow", and for that, all we need to do is change the blend mode from "Screen" to Multiply:

I'm going to change a few other options here as well for the Inner Glow. First, I'm going to lower the Opacity value to around 50%. Then, in the "Elements" section in the middle, I'm going to raise the Choke value to about 10% and the Size value to 13 pixels:

Again, feel free to experiment with those values on your own.
Here's my effect so far with the Inner Glow applied:

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