Think of an ancient illuminated text, or the start of a fairy tale — the large first letter that sometimes begins a chapter. In modern typography, that's referred to as a drop cap. Create one in Word when you want to convey elegance at the start of your document.
The steps are simple: You select the letter you want to turn into a drop cap, and click Drop Cap on the Insert tab. The drop cap sits in a text box, and you can apply any text formatting to it. The picture shows examples of different fonts you might use.
You can turn only a single letter into a drop cap. Even if you select a block of text, only the first letter is affected. Also, only the first letter of a paragraph can become a drop cap.