Ah.  I'm using Photoshop Elements, actually...version 6.  The feathering option is for the cookie cutter tool, but not crop, which is what I used to get my buildings.  I don't think that's the problem, since you can't see any sort of outline in the original composite, it only appears after it's imported into CTA.  But thanks so much for the suggestion! 

M.

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So I decided to do some more test renders using the "feathering" theory...and I got the opposite result from what I expected!  I used one heart with no feathering (first pic) and the same heart with feathering of 10 pixels (second pic).  The unfeathered heart renders in CTA WITH an outline, but the 10-pixel-feathered heart comes out with NO outline.  Go figure.  Although the edges will be less crisp than I would like, I will redo my project using the cookie-cutter tool and see if the quality improves.

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I've been struggling with this too in the sprite editor for actors. Any image I bring in to replace a body part has the white edge.

Finally found a solution:

In body composer, select the body part you are replacing with an image. Click the EDIT MASK button. Contract the mask by -1. Sorted

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Wee Bit Studios