The present invention provides a retroreflective sheet with a discernable image. The retroreflective sheet comprises a transparent polymeric spacing layer having a first surface and a second surface; a layer of transparent microsphere lenses embedded into the first surface of the spacing layer at varying depths forming an image, wherein the spacing layer adheres to and conforms to the microspheres; and a reflective layer adhered to the second surface of the spacing layer. The present invention also provides methods for preparing such retroreflective sheet.