You may wonder what Tilt-Shift means... A Tilt-Shift lens enables you to rotate the lens against the image plane, hence “tilt”, and also “shift”. These movements of the lens create an optical illusion where scenes appear wide and dramatic with objects in it looking miniature. The effect is achieved by focusing on a part of the image and blurring out its surroundings.
Using Photoshop, let’s see how we can mimic the images shot with a Tilt-Shift lens.
Before & After
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This technique doesn't work for all photos, so try to pick the right ones. Photographs with miniature-looking objects are usually taken from the top, so images that usually work best are those with elevated angles. Also, photos that contain people are the most interesting.
1. Open image in Photoshop and create a duplicate copy. Next, enter Quick Mask Mode (Q). Image ID: 3763657 © Valeriy Ivanov 123rf.com
2. Set your Foreground and Background colors to black and white respectively (D). Then select the Gradient tool (G) and use 'Reflected Gradient'.
3. Whilst holding down the Shift-key, click and drag a line upwards starting from where you want your focus point to be, and your end point, and this will prepare a layer where the blur transition takes effect. For this part, you might have to try a few times to get a good result (If you're not satisfied with the outcome, just hit undo and try again till you think it's right).
4. Once done, you will see that the area where you've applied your gradient has turned red - The strongest being at your main focus area, slowly fading off as it moves further away in the image's background.
5. Now that you've selected the area you wanted, tap (Q) again to switch from Quick Mask Mode to Standard Mode. The areas that are selected will be the parts that will be blurred out.
6. Now go to Filter > Blur > Lens Blur and adjust the Radius to determine how blur the photo will be. I set mine to 20. This area is subjective and differs from photo to photo, so tweak it until it looks just about right to you. However, make sure not to overdo it.
7. Tap on Ctrl/Cmd+(D) to clear the selection.
8. Now we adjust the colors and lighting, which is usually bright and contrasted. We will first add a new adjustment layer for Hue/Saturation (Layer > New Adjustment Layer > Hue/Saturation). Slightly increase the saturation. I set mine to +25. 
9. Okay now let’s create another adjustment layer for the Curves. (Layer > New Adjustment Layer > Curves). Here are my settings.
10. To make the effect more obvious, crop (C) the image slightly. And we're done!
Here are a few more examples:
Image ID: 1921796 © Andy Dean 123rf.com
Image ID: 2029656 © iofoto 123rf.com
Image ID: 2495336 © imajdeposu 123rf.com
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