Do you have two or more pixel layers selected in the layers panel before trying Edit>Auto-Blend Layers?
Or where in photoshop is the Auto-Blend grayed out?
What version of photoshop and operating system are you using?
Posting a screenshot of the photoshop window with the layers panel visible might be helpful.
Thank you for replying.
I managed to get it to work. For each layer I selected all and did a copy and paste to create new layers. The new layers were able to be auto-blended. This is not in the adobe instructions. I am using CS6.
You cannot apply Auto Blend Layers Command on CMYK images, you can apply this command only on RGB or Grayscale images. You can’t apply it to background layers, Smart Objects or Video layers as well.