Photoshop Elements 12 removed pictures from iPhoto

More info needed

Installing PSE 12 has no effect on iPhoto in and way

What eske did you do? For example Adobe Bridge can destroy the iPhoto library. What did you do beyond "install" PSE

LN

I installed Photoshop Elements 12 then imported photos

It sounds like you had Adobe Bridge move the orignal photos out of iPhoto to its own folder system. That's not how you use PSE with iPhoto.

Once you get the iPhoto library back together, either by restoring the backup copy made just before this happended or creating a new library and importing the photos Adobe Bridge moved out you can setup PSE to work within the iPhoto Library as follows:

Using Photoshop or Photoshop Elements as Your Editor of Choice in iPhoto.

1 - select Photoshop or Photoshop Elememts as your editor of choice in iPhoto's General Preference Section's under the "Edit photo:" menu.

2 - double click on the thumbnail in iPhoto to open it in Photoshop. When you're finished editing click on the Save button. If you immediately get the JPEG Options window make your selection (Baseline standard seems to be the most compatible jpeg format) and click on the OK button. Your done.

3 - however, if you get the navigation window

that indicates that PS wants to save it as a PS formatted file. You'll need to either select JPEG from the menu and save (top image) or click on the desktop in the Navigation window (bottom image) and save it to the desktop for importing as a new photo.

This method will let iPhoto know that the photo has been editied and will update the thumbnail file to reflect the edit..

With Photoshop Elements the Saving File preferences should be configured as shown:

I also suggest the Maximize PSD File Compatabilty be set to Always. In PSE’s General preference pane set the Color Picker to Apple as shown:

Screenshots are from PSE 10

Note 1: to switch between iPhoto and PS or PSE as the editor of choice Control (right)-click on the thumbnail and select either Edit in iPhoto or Edit in External Editor from the contextual menu. If you use iPhoto to edit more than PSE re-select iPhoto in the iPhoto General preference pane. Then iPhoto will be the default editor and you can use the contextual menu to select PSE for your editor when desired.

Note 2: editing a RAW file with either PSE or PS creates a new file which must be saved outside of iPhoto, i.e. the Desktop, and imported as a new photo into the iPhoto Library.

OT

Make sure you've selected the Adobe Photoshop Elements Editor.app in iPhoto instead of the alias named "Adobe Photoshot Elements 12" which opens the organizer instead of the editor:

The screenshot is for PSE 10 but I imagine it's the same for 12.