How to set size for local image using knitr for markdown?

Here's some options that keep the file self-contained without retastering the image:

Wrap the image in div tags

<div style="width:300px; height:200px">
![Image](path/to/image)
</div>

Use a stylesheet

test.Rmd

---
title: test
output: html_document
css: test.css
---

## Page with an image {#myImagePage}

![Image](path/to/image)

test.css

#myImagePage img {
  width: 400px;
  height: 200px;
}

If you have more than one image you might need to use the nth-child pseudo-selector for this second option.

Un updated answer: in knitr 1.17 you can simply use

![Image Title](path/to/your/image){width=250px}

edit as per comment from @jsb

Note this works only without spaces, e.g. {width=250px} not {width = 250px}

You can also read the image using png package for example and plot it like a regular plot using grid.raster from the grid package.

```{r fig.width=1, fig.height=10,echo=FALSE}
library(png)
library(grid)
img <- readPNG("path/to/your/image")
 grid.raster(img)
```

With this method you have full control of the size of you image.

The question is old, but still receives a lot of attention. As the existing answers are outdated, here a more up-to-date solution:

Resizing local images

As of knitr 1.12, there is the function include_graphics. From ?include_graphics (emphasis mine):

The major advantage of using this function is that it is portable in the sense that it works for all document formats that knitr supports, so you do not need to think if you have to use, for example, LaTeX or Markdown syntax, to embed an external image. Chunk options related to graphics output that work for normal R plots also work for these images, such as out.width and out.height.

Example:

```{r, out.width = "400px"}
knitr::include_graphics("path/to/image.png")
```

Advantages:

• Over agastudy's answer: No need for external libraries or for re-rastering the image.
• Over Shruti Kapoor's answer: No need to manually write HTML. Besides, the image is included in the self-contained version of the file.

---

Including generated images

To compose the path to a plot that is generated in a chunk (but not included), the chunk options opts_current$get("fig.path") (path to figure directory) as well as opts_current$get("label") (label of current chunk) may be useful. The following example uses fig.path to include the second of two images which were generated (but not displayed) in the first chunk:

```{r generate_figures, fig.show = "hide"}
library(knitr)
plot(1:10, col = "green")
plot(1:10, col = "red")
```

```{r}
include_graphics(sprintf("%sgenerate_figures-2.png", opts_current$get("fig.path")))
```

The general pattern of figure paths is [fig.path]/[chunklabel]-[i].[ext], where chunklabel is the label of the chunk where the plot has been generated, i is the plot index (within this chunk) and ext is the file extension (by default png in RMarkdown documents).