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I received a great deal of feedback regarding my quick tutorial on getting GarageBand to recognize loops on an external hard drive, and several follow up questions asking if it was possible to do something similar with iPhoto. The answer is yes, with a but?
Like the Apple Jam Pack loop collection, iPhoto, and the very fun PhotoBooth, applications use the internal hard drive and the User>Pictures>iPhoto Library folder to store images. This means when you use iPhoto to examine, manipulate, or create a photocast of your thousands of photos, your internal hard drive once again fills to the brim.
It is very easy to keep your files on an external drive or folder and still have them accessible from iPhoto. We can do this by making a change to the way iPhoto imports photos.
Go to iPhoto Preferences, then to the Advanced tab. Turn OFF "Copy files to iPhoto Library folder".

With this taken care of, you are free to move all of your photos from your iPhoto Library>Originals folder to your external drive. The other folders contain thumbnail, and other data that will be rebuilt automatically.
Once safe in the new location, feel free to delete the original images in your iPhoto Library folder.
Now, launch iPhoto, and then drag the photos from your external drive to the library icon in the application. The photos will be added to iPhoto and indexed.


If you open the iPhoto Library folder on the hard drive, it will appear that all of your photos have been moved back to your internal hard drive ? but look closely... you will see these are only alias files instead of the originals.

Since alias files take up little to no space, you've freed up even more space on your internal hard drive. Hooray!
Now for some bad news. If you are just using your images for photocasts, viewing, slideshows, iWeb, iMovie, and so on, then you are going to be okay with this work around. However, if you modify or tweak the original photo, the adjusted file will be saved in the iPhoto Library folder on your hard drive.
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