Images can be placed in Word via the Insert > Picture menu or by dragging-and-dropping them directly onto a page. But a Word shape can also be filled with a picture, and the edges of the shape will crop (or mask) the image it contains.
To fill a shape with a picture:
1. Select the shape then click the down arrow next to Shape Fill from the Shape Styles group on the Drawing Tools/Format tab. Select Picture…
2. When the Insert Pictures dialog box appears, click the Browse button and navigate to where your pictures are stored. Select the picture you want and click Insert.
Word will automatically re-size the inserted picture to fill the circular shape. If the image does not match the shape’s proportions it may appear pinched or stretched.
3. To correct the proportions select the image and click the Picture Tools/Format tab in the Ribbon, locate the Size group on the far-right, open the crop menu by clicking the Crop down-arrow button, and select the Fill option.
4. You’ll see crop bars around the shape area and a greyed out area with handles extending beyond the shape area. This greyed out area is the part of the picture that will be cropped or ‘masked’ by the shape. Click and drag these handles to resize the picture (holding down the Shift key will keep the picture in proportion).
5. When you have the desired size, click on the picture and drag it into the correct position.
6. To deselect the picture, click on the Crop tool button or anywhere in the document area.
The process is similar in Word 2010 as you can see in our video guide: