Images
To add an image, make sure you are in editing mode (the screen will say "Draft" in the upper left corner), and choose one of the following:
Copy-Paste:
On another website, right click on the image you'd like to include in your Medium story (assuming you have the rights to use the image). Choose "Copy image" from the right click menu.
Go to the Medium editor and either right-click and choose "Paste" or press Ctrl/Cmd + V on your keyboard.
Drag and Drop:
From your desktop, you can drag and drop an image directly into the Medium editor:

Using the Embed Toolbar:
When you press "Enter," a new line is created and a "+" sign appears in the left margin. Click the "+" sign and the embed toolbar appears.

Click on the camera icon in the toolbar to add an image.
An upload dialog will open and you can select an image saved on your desktop to upload.

After your image uploads, it will be selected and highlighted with a green border. When you click on and select an image, the image toolbar will open, giving you all available options for aligning your image relative to the body of your story:

Image Toolbar Options
Image toolbar options vary depending on the size of the image you've uploaded. You will only see the options appropriate for that image dimension.
There are four options in total for images which are large enough:
Default

Default image placement tries to match the image dimension to the column width of the body of your story.
If the image isn't wide enough to fill the whole column, it will not:

Smaller images by default will appear centered in relation to the body of the story.
Left-Aligned
Click on the left-align option in the image toolbar to have the body text flow around your left-aligned image:

Wide
Click on the wide option in the image toolbar to have your image width exceed the body text column of your story:

Full-Width
Click on the full-width icon in the image toolbar to scale your image to fill the width of the page in your browser window:

Preferred Image Sizes
- Full column-width images: 1400px

- Out-set images: 2040px

- Screen-width images: 2500px

Note: In general, larger image sizes will still look good when scaled down, but the reverse is not true.
Image Grids
When you upload multiple images, an image grid will be automatically generated for you.

Once you publish, readers will be able to click on each image independently to view a larger version.
Image Captions
To add a caption to an image (optional), click on it so that its border changes to green. Start typing your caption and it will appear beneath the image:

Set Featured Image
When your published story is shown in the reading lists of users on Medium, the preview will appear with a featured image (if you've included any images):

The preview image, by default, is simply the first image that appears chronologically in a story. This featured preview image is also used when your post is linked or embedded in social media or other websites:

You can change the featured image in a story (assuming you have more than one image) by clicking on that image so that a green border appears:

Once the image is selected, press on your keyboard:
- Ctrl + Alt + 8 / Command + Option + 8 Set as featured image
- Or Shift + F
The image border will turn red, indicating that you have succeeded:

Linked Image
To add a hyperlink to an image, click on that image so that its border turns green.

Once the border is green, press on your keyboard:
- ⌘ + K / Ctrl + K Add link to image

Paste or type in your link and press enter. When you run your mouse over the image, the hyperlinked address will show. Once published, users will be able to click on that image to visit the linked URL.