Create Custom Header in Blogger Templates

1. Log in to your blogger blog.
2. Go to Layout >> Edit HTML
3. Make a back up of your blog by clicking on Download Full Template.
4. Now search for the following code in your HTML Template

 1' showaddelement='no'> true' title='Header (Header)' type='Header'/>  

Look at the above code. Few parts are written in bold letters. You have to change them in order to allow custom header to be used. Change 1 to 2, change no to yes and change trueto false.

Save the template and go the Page Elements. Look at the header section of your template, a new Add a Gadget option should be there.

Here you can customize your template the way you want. If you want a gorgeous picture as your blogger header, but do not want it to link to your blog’s homepage, you can do it by choosing the Picture option and uploading your picture. Now, your blog will show your uploaded picture as your blog’s header but it will link to nowhere.
If you want to have a header picture and it should link to your blog’s homepage, you can do it by adding some HTML tag. First upload your picture somewhere. You can use imageshack,tinypic, photobucket to host your pictures for free. After uploading your picture get the direct link to that picture. Now click on Add a Gadget >> HTML/JavaScript and add the following code there. Leave the title field blank. Remember to replace YOUR-BLOG-URL with your actual blog address and also replace LINK-TO-YOUR-IAMGE with the actual link to your image and then Save.
YOUR-BLOG-URL">LINK-TO-YOUR-IAMGE">
Now we have got a new header on your blog. But your old header is still there. Remove the old header by clicking on Edit >> Remove.
You are done now with a new blogger custom header.