I have two overlapping pictureboxes.The images of both picture boxes have some transparent pixels.I want to see the bottom picture box through the transparent pixels of the
Clearly you are using Winforms. Yes, transparency is simulated by drawing the pixels of the Parent. Which is the form, you only see the form pixels, stacking effects don't work. There's a KB article that shows a workaround for this. It is painful. Another approach is to not use PictureBox controls but just draw the images in the form's Paint event.
Consider WPF, it has a very different rendering model that easily supports transparency.