Opacity or Alpha values range from 0 (completely transparent) to 255 (completely opaque). To adjust a layer's Opacity setting, highlight the layer in the Layers Window (see above - the Active Layer) and press the F4 key.
Layers can have their own opacity setting. Opacity is applied to every pixel in the layer, so it acts like layer-wide transparency setting. Assign any layer the active status by clicking on the layer in the Layers Window.