A mouse is useful for working with images in Word, because you have more control of the size and shape when you can click and drag the image.

Choose Picture From File if your image is on your desktop or in another folder. [1] X Trustworthy Source Microsoft Support Technical support and product information from Microsoft. Go to source

Text wrapping will allow the text to wrap around the image, go over the image or beside the image.

Clicking outside of the image will take the picture formatting menu away and bring you back to the text formatting menu. [2] X Research source

Clicking outside of the image will take the picture formatting menu away and bring you back to the text formatting menu. [2] X Research source

Choose Square if your image is square and you want to wrap the text around the square border of your image. Choose Top and Bottom if you want the image to stay on its own line, but be between text on the top and bottom. Choose Tight to wrap text around a round or irregularly shaped image. Choose Through to customize the areas that the text will wrap. This is best if you want the text to be incorporated with your image in some way, or not follow the borders of the image file. This is an advanced setting, because you will pull or drag image points in and out of their original borders. Choose Behind Text to use the image as a watermark behind the text. Choose In Front of Text to display the image over the text. You may want to change the color, or it can make the text illegible.