The Transform tool lets you resize the contents of your whole layer or a selected part of it. The keyboard shortcut for this by default is SHIFT+T.
Clicking on the boxes around the selection will resize from that point. Hold down Shift while dragging to maintain size ratio.
Clicking and dragging outside the box will rotate the selection.
Transform tool actions
Various actions are available in the settings panel.
Rotate clockwise and counterclockwise 90 degrees at a time.
Flip horizontal axis - will flip the left and right sides of your selection
Flip vertical axis - will flip the top and bottom sides of your selection
Scale selection to fit will scale up or down until the first edge of selection reaches the edge of canvas.
Cover will scale to completely cover the entire canvas with the contents of your selection.
Reset will reset any scaling and set the selection in the center of your canvas.
Pinch and stretch evenly
To pinch and stretch your selection evenly, press and hold Alt and then click and drag any of the outer boxes. The anchor point in the center of the selection will be the point that the object pinches toward or stretches out from.
Holding SHIFT and Alt together, while the anchor is in the center will resize the selection evenly outward or inward from that point.
Anchor your rotation
Shifting the anchor point of your selection will also make this the center of any rotation action. This means that the sides will rotate around this point rather than around the middle of the selected area.
Moving the transformed object
While hovering in the general area of your selection while the Transform tool is active, the cursor becomes a 4-headed arrow. Clicking and dragging when this cursor shape is visible will move your object.