Here's original image. Very nice kitten.
Step 1. Duplicate the background.
Press Ctrl-J to duplicate 'Background' layer. Rename new layer to 'Caricature base' (I prefer to give meaningful names to layers always, even if you have only 3 - 4 of them; and if you have 5-10 layers proper naming is "a must").
Step 2. Use Filter - Liquify.
Liquify filter is a powerful tool to create caricature images. It's very easy - use tools on the left and set parameters on the right.
Here are some tips for Liquify filter:
T o change brush size quickly move your mouse over 'Brush Size' words (on the right) and drag
Set Brush Rate to 40-80 to control speed of "static" changes when you hold mouse button and not moving your mouse (Bloat and Pucker tools)
Set Brush Pressure to 40-50 to have more control over distortions when you move mouse
Make a lot of short and gentle strokes, not long drags
Ctrl-Alt-Z to undo, Ctrl-Shift-Z to redo
Step 3. Duplicate liqufied layer.
Press Ctrl-J to duplicate "Caricature Base" layer, then rename new layer to "Contours".
Step 4. Create contours to make image look drawn.
The quickest way to create contours is Filter - Stylize - Find Edges. Then press Ctrl-Shift-U to desaturate.
Step 5. Set Blending mode to Multiply.
The last step. Set blending mode of "Contours" layer to Multiply. Also try to change layer opacity to 60-90%.
One more example of using "caricature sketch" technique:
More Tutorials: 
