Does UV texture mapping support transparency?

I am using the uv editor correctly, using a tif image with transparency, however in the uv editor and after rendering, the transparent parts just appear as black. Is there a special setting I have to check off?

you have to load the image into a texture channel ( not sure if tiff format works though ) then, press ‘use alpha’ and in the materials buttons, set mapping to UV, ckick on the ‘alpha’ button, click ‘ztransp’, and turn the alpha slider all the way down.