Support for tiff files has been removed from the latest versions of pdftex and pdflatex. However, it is possible to configure TeXShop so it will automatically convert graphics in tiff format to png format during typesetting. As a bonus, the program will convert graphics in eps format to pdf format during typesetting. In both cases the original graphic file is preserved and a new file with appropriate format is created. Tiff files must still have extension ".tif" rather than ".tiff".

To activate these conversions, make sure your TeX source header contains these lines:

  \usepackage{graphicx}
  \usepackage{epstopdf}
  \DeclareGraphicsRule{.tif}{png}{.png}{`convert #1 `dirname #1`/`basename #1 .tif`.png}

How do I configure TeXShop?
Converting Graphic Formats Automatically