There are many different image formats that can be used in Photoshop, and each has its own advantages and disadvantages. The format that is best for a particular image depends on the intended use of the image. For example, images that will be printed need to be in a high-resolution format such as TIFF or EPS, while images that will be displayed on the web need to be in a lower-resolution format such as JPEG or GIF.
The highest quality image format in Photoshop is the TIFF format. TIFF images are lossless, meaning that no data is lost when they are saved.
This makes them ideal for storing images that will be edited or printed. However, TIFF images are also large, so they are not suited for use on the web.
The JPEG format is also a high-quality image format, but it is lossy, meaning that some data is lost when the image is saved. JPEG images are smaller than TIFF images, so they are more suitable for use on the web. However, because some data is lost when a JPEG image is saved, it is not ideal for storing images that will be edited or printed.
The GIF format is a lower-quality image format than both TIFF and JPEG, but it has the advantage of being able to support animation. GIF images are suited for use on the web, but because they are lower quality, they should not be used for printing or editing.
Conclusion:
The highest quality image format in Photoshop is TIFF. However, for images that will be displayed on the web, JPEG or GIF may be more suitable.