To make the control “transparent”, you must direct the correct area of your parent to the control. What Button does before it draws its contents so that the rounded corners are transparent.
To mimic the translucency, you can draw a shape on the panel, and then draw something using Alpha:
private void panel1_Paint(object sender, PaintEventArgs e) { PaintTransparentBackground(panel1, e); using (Brush b = new SolidBrush(Color.FromArgb(128, panel1.BackColor))) { e.Graphics.FillRectangle(b, e.ClipRectangle); } } private static void PaintTransparentBackground(Control c, PaintEventArgs e) { if (c.Parent == null || !Application.RenderWithVisualStyles) return; ButtonRenderer.DrawParentBackground(e.Graphics, c.ClientRectangle, c); }

Note that ButtonRenderer.DrawParentBackground does not draw form controls that overlap with the panel, but only the background of the form.
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