How to Display a GIF in Tumblr
A common trend on Tumblr is posting GIF images. Some of these images are designed to convey motion in an artist way, such as a scene from a television show or movie; other GIF images are made especially for adding to posts to express an opinion or reaction. Tumblr offers two simple ways to insert an image into your post: either by uploading it from your computer or hosting it externally and linking to it.
Instructions
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Uploading an Image
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Open the post that you want to add an image to. You can add an image to original and reblogged posts of any kind except chat posts.
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Click the grey "Upload a Photo" link in the upper right corner directly above the formatting menu. Make sure your cursor is at the point in the post where you want to the image to appear.
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Select the image that you want to insert into the post and click "Open." This will upload the image to Tumblr and load the image into your post.
Posting an Externally Hosted Image
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Copy the image URL of the image that you want to post. You can host images on a number of sites and services, including Photobucket, TinyPic, and Dropbox.
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Open the post that you want to add your image to. You can add an image to any post that you can make additions to via the text editor, both new and reblogged.
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Click the photo icon on the formatting toolbar. This icon is located between the blockquotes and link icons and looks like a small picture. The "Insert/Edit Image" dialog will open in a small pop-up window.
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Paste the URL for your image in the text box below "Image URL." You can add a description if you want; descriptions are most often used by programs assisting visually-impaired computer users, but are not strictly necessary. You can set the location for your image though by default it will upload wherever your cursor is in the editor. You can change the dimensions of your image but if you leave this field blank the image will display as it's original size.
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Click "Insert" to load the image into your post.
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Tips & Warnings
If you insert an externally hosted image it will show up on your dashboard as a grey box. Visitors can click this box to see the image, and it will show up without the grey box on your page.