unfortunately, though IE7 supports transparent PNG's, only one filter can be applied to an element at a time.

What is happening in your application is that IE7 is applying the alpha filter to your PNG, and is then asked by jQuery to apply another alpha filter for the fade. This has visible results like you said.

The way to get around this is to nest your png inside a container and then fade the container. Sort of like this:

<div id="fadeMe"> <img src="transparent.png" alt="" /> </div>

Another way to get around this is this simple jQuery plugin that i used because i couldn't change the structure. I would give attribution but I honestly cant remember where i found it.

/* IE PNG fix multiple filters */ (function ($) { if (!$) return; $.fn.extend({ fixPNG: function(sizingMethod, forceBG) { if (!($.browser.msie)) return this; var emptyimg = "empty.gif"; //Path to empty 1x1px GIF goes here sizingMethod = sizingMethod || "scale"; //sizingMethod, defaults to scale (matches image dimensions) this.each(function() { var isImg = (forceBG) ? false : jQuery.nodeName(this, "img"), imgname = (isImg) ? this.src : this.currentStyle.backgroundImage, src = (isImg) ? imgname : imgname.substring(5,imgname.length-2); this.style.filter = "progid:DXImageTransform.Microsoft.AlphaImageLoader(src='" + src + "', sizingMethod='" + sizingMethod + "')"; if (isImg) this.src = emptyimg; else this.style.backgroundImage = "url(" + emptyimg + ")"; }); return this; } }); })(jQuery);

NOTE Originally the plugin was written to fix PNG transparency in IE6 but I modified it to work with your problem in IE6+.

Sidenote: I cant remember off the top of my head but i think that IE8 may have the same problem. Correct me if i'm wrong :)