Start by being realistic
A vector trace follows the boundary between colours in the pixels you give it. If the boundary is blurry, the trace is a guess; if a stroke is two pixels wide, the trace is a two-pixel-wide guess. No preset recovers detail that is not there. The honest question is not "which setting sharpens this?" but "do I have a bigger or cleaner version of this logo anywhere?" — an old print-ready file, an e-mail signature, the original designer's file. Any of those beats a thumbnail.
Bigger helps only up to a point: images over 2048 pixels on the long side are scaled down to 2048 pixels before tracing, so a source at that size already gives the tracer everything it will use.
What JPEG does to a logo
JPEG compresses 8×8-pixel blocks and discards fine colour detail. On photographs that is invisible; on a flat two-colour logo it produces ringing along every edge (halos of slightly wrong colour), block edges in flat areas and a spray of near-duplicate colours where there should be one. Traced naively, each of those near-duplicates can become its own ragged path.

Our owl logo reduced to 128 px and saved as a JPEG at quality 30 (left, enlarged to show its pixels). Traced at 3 colours, its true count, it comes back as 13 clean paths (middle). At 12 colours the compression noise returns as halos and specks: 11 colours, 59 paths (right).
The built-in clean-up
Every colour trace — the Standard, Cricut / Vinyl and Detailed artwork presets, with Smooth curves on or off, JPEG or already-flat PNG — goes through the same palette clean-up before anything is outlined. Only Line art / Stencil skips it, because it reduces the picture to black and white instead.
- With Smooth curves on, small images are first enlarged smoothly, so the boundary between two colours can fall between the original pixels rather than on their grid.
- The colours are chosen from "interior" pixels only — those inside flat areas, away from edges, where JPEG ringing lives. Colours that differ only by compression noise are merged; a small colour that is clearly different, such as a thin outline, is kept while the colour count allows.
- Every pixel is snapped to one of the chosen colours. Pixels on an edge are decided between the two colours on either side, so a halo of in-between shades does not become a colour of its own.
- Specks smaller than 4 pixels take the colour around them (Detailed artwork keeps smaller ones; Cricut / Vinyl adds its own, stronger cutting clean-up), so crumbs do not become shapes of their own.
On a very large, very noisy image the clean-up can run out of time; the tracer then reduces the colours in a simpler way. That is rare.
Preparation that helps
- Upscale only if you will also clean up. The tracer already enlarges small images before choosing colour boundaries (step 1 above), so resizing a 300-pixel logo to 1200 pixels yourself adds no information of its own. It pays off when you then repair the enlarged image by hand — straighten an edge, fill a gap, remove a stray mark — at a size where that is easy.
- Reduce the colours yourself. In an image editor, posterise or index the logo to its true colour count with no dithering. A two-colour logo saved as an indexed PNG with two colours traces almost perfectly.
- Fill the background with one flat colour (or make it transparent) so background removal can take it out cleanly.
- Crop tight. Border artefacts and stray marks near the edges confuse the background detection.
- Save as PNG. Re-saving a JPEG as a JPEG adds another round of loss.
Settings for a noisy source
Standard preset, Smooth curves on, colours set to the true count. Lowering the colour count is the single most effective control on a noisy logo: with 3 colours, every ringing pixel has to be assigned to one of three real fills, which is exactly the clean-up you want.
If small text becomes unreadable, do not raise the colour count — that can let noise back in as extra shades. Instead, upscale the source or accept that text below roughly 10 pixels tall will need to be retyped with a font in a vector editor and placed over the trace.
What to check in the preview
- The palette strip lists only your logo's colours (plus background).
- With Layers set to By color, the path count equals the colour count: a clean three-colour logo is three paths. If the palette shows two near-identical shades of one colour, lower the count by one.
- Zoom into the edges; a slight softness is normal after clean-up, but wobbling outlines mean the source is too small.