1. Open a new image – transparent background.
Fill the first layer with your choise of color – not to dark…
Now select the Type Tool and use the same color that you used on your backround.
Type the wanted text and click ok.
Ctrl + leftclick your text layer to select the text.
Your image should look similar to fig. 1.

Figure 1

2. Now you have to render the text layer. (Layer – Type – Render Layer).

Then use the Brightness/Contrast function to darken the text a little bit.
Image – Adjust – Brighntess/Contrast.
Brightness: -8
Contrast: 0

3. Now it’s time to add some inner shadow to the text to give the text that chiseled look.

Go to Layer – Effects – Inner Shadow.

I used the following setting, but if you use the effect on larger text you may want to increase the distance a little bit. Play around with the settings until you have the apperance you are looking for…

Your image should now look like figure 2.

Figure 2

4. With the text still selected go to the first layer and click on the new layer button.

Call this layer White Shadow. Turn off the text layer by clicking on the eye icon.

Select White as your foreground color and fill your selection with white using the Paint Bucket Tool.
Deselect (Ctrl + D).

Still at the White Shadow layer go to Filter – Blur – Gaussian Blur – Radius: 2 pixels.
Your image should now look like fig. 3.

Figure 3

5. Select the Move Tool and move the white shadow layer 2 pixels down and 2 pixels to the right using the arrow keys.
Turn on the text/cutout layer again.
Turn down the opacity on the white shadow layer till you get the wanted effect.
I turned the opacity down to 70 %.
You image should now look like fig. 4.
It’s starting to get pretty cool, but I wanted to add some details to get rid off the “plastic” look….

Figure 4

6. Go back to layer 1 (background layer).
Duplicate it by dragging it down to the Create New Layer icon.

Turn off the new layer and go back to layer 1.

Now go to Filter – Noise – Add Noise – Amount 25, Uniform and Monochromatic checked.
Select the text/cutout layer and apply the same effect.
I also darkened the text a bit more (Image – Adjust – Brightness/Contrast – Brightness -16, Contrast 0).

Now go to the Layer 1 Copy layer and turn down the opacity until you get the wanted effect. I turned the opacity down to 71 %.

Your final image should look like fig. 5.

Figure 5