Which option allows you to import an individual layer from a Photoshop file?

The option that allows you to import an individual layer from a Photoshop file is called "Footage." When you import a Photoshop file (PSD) into After Effects, it is treated as a footage item. Selecting the "Footage" option gives you the capability to import the entire file, but crucially, it also allows you to choose specific layers from that file during the import process.

This functionality is significant because it enables users to work effectively with layered PSD files, keeping their workflow organized and tailored to their project needs. It empowers users to select individual layers that they want to animate or manipulate within After Effects, rather than bringing in the entire composition, which might contain elements that are not necessary for the task at hand.

The mention of "Composite Layer" refers to the entire visual representation of all layers combined within that file, rather than offering the flexibility to select individual layers. "Layer Import" is not a recognized term within After Effects, and "Selected Layer" is not a specific import option that is presented when dealing directly with Photoshop files in After Effects. Therefore, "Footage" is the correct answer, as it succinctly describes the process of importing layers from a PSD file into After Effects.