To edit a texture, create a new GIF, JPEG, PNG, or RGB image. Delete the old texture from its palette. Drag-and-drop the new texture file into the palette.
Find it: Looks palette > Texture Editor
Click Accept when you want to apply the texture to the selected object in your scene.
Note: Dragging and dropping an image onto the palette will add it to the palette. Dropping it onto the model will apply it to the model (without adding it to the palette).
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