Dear @Lurth Gopalakrishnan,
Thank you for posting your question in the Microsoft Q&A forum. From your description, I understand that in Microsoft Word, when you try to insert custom watermark by selecting picture from your PC, nothing happens. The button appears clickable, but it does not open the file picker or respond.
To better assistance, could you please confirm:
- Does this happen in all Word documents, or only in a specific file?
- Does the same behavior occur after closing and reopening Word?
- Are you able to test this by starting Word in Safe Mode?
In the meantime, I recommend:
1/ Closing all Word apps and reopening Word, then trying again
2/ Testing in Word Safe Mode
- Close all Microsoft Word windows.
- Press Windows + R on your keyboard.
- Type winword /safe and select OK.
- Word will open in Safe Mode (you may see “Safe Mode” in the title bar).
- Open the document again and go to Design > Watermark > Custom Watermark > Picture watermark and click “Select Picture > From a file / Select from PC”
3/ Run Microsoft Office Repair (to refresh Word)
- Close all Office applications.
- Control Panel => Programs and Features > looking for Microsoft 365 App > right-click and choose Change > Online Repair

Please understand that our initial response does not always resolve the issue immediately. However, with your help and more detailed information, we can work together to find a solution.
I truly appreciate your patience and understanding. If you have any further questions or need further clarification, please feel free to reach out. I'm looking forward to hearing from you.
Thank you for your cooperation.
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