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I am creating a geologic map in ArcMap and I want to georeference a PNG of my topographic contours. I need to use a specific set of contours, so I cannot generate them within Arc. I have PNG file that contains just the topo lines with a transparent background that I adjusted with adobe illustrator. I'd like to georef this and drape it over my map with colored polygons. However, when I georeference this PNG, it is no longer transparent. Is there a way to georef this file and retain the transparency so I can see my polygons beneath?

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I am assuming you are talking about ArcGIS 10.x since your post does not mention Pro.

After you geofererence your image (with an existing alpha band that is transparent) your transparency should prevail. Select the rectify option in the Georeferencer and save the images as a new PNG. Add the new imagesto ArcMap the transparency will appear white. From the layer symbology set the layers Alpha band to Band_4.

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