How do I go about setting up a Photoshop file for screen printing on T-shirts?

I’ve never done the printing myself, but I have submitted images to cafepress.com to be printed onto shirts. It sounds like you’ve hit the important points, but also I wanted to mention that if you want your design to have no background (as in, you don’t want the printed area to be a square shape – you want the background parts to be left alone) make sure your image doesn’t have a white background. It’ll have to have no background (represented in photoshop by a checkerboard pattern of white and light gray) and you’ll have to save it as a GIF or PNG (preferably a PNG because GIFs are shitty quality), NOT a JPG.

I am taking a screen printing workshop on this coming Sunday! I will let you know what I learn. I am taking a composite of my 3 dogs. I took a good head angle from several different pics. Lowered their threshold until they were black and white (they would make a great 2 part stencil too). I am taking that along to see if I can use it. I have always wanted to know about screen printing.

There are several ways.Personally, I would use Freehand or Illustrator, (and if possible, create in vector art) to make a file for silkscreening. I wouldn’t use Photoshop.

Printing (silkscreen or offset) uses dots and lines to make the image.
Silkscreen requires a more coarse screen than offset printing. Ask your printer what file types and screen values they prefer and can use.

One quick method of making a viable file in Photoshop is this:
Select: Image/Mode/Bitmap.
Select: Image/Image Size. Set your image size and resolution.
If you need to knock out the background, on the Layers Palette, double click the layer name to unlock the layer. Using the Magic Wand Tool and/or eraser, clear out the unwanted areas.

File type accepted is usually a jpeg or tiff. PNG is for web and while it looks marvelous on screen, it isn’t much good anywhere else. Call your screenprinter to ask what file format they require. Good luck.

Good advice already in this thread, esp. @Mariah to make sure the background is transparent/no-color rather than white
and
@Jewel “Ask your printer what file types and screen values they prefer and can use”
They’ll want you to be happy with your results and have seen their share of stuff that doesn’t work. They probably have some guidelines for good art for their process.