Xwad

A copy of this program can be found in the bin folder of the sourcesdk. This tool can convert WAD, BMP, and SPR files to VTF and accompanied VMT files.

Help from xwad run without any parameters:

        [-AutoDir]
                Automatically detects -basedir and -wadfile or -bmpfile based
                on the last parameter (it must be a WAD file or a BMP file.
        [-decal]
                Creates VMTs for decals and creates VMTs for model decals.
        [-onlytex <tex name>]
        [-shader <shader name>]
                Specify the shader to use in the VMT file (default
                is LightmappedGeneric.
        [-vtex]
                If -vtex is specified, then it calls vtex on each newly-created
                .TGA file.
        [-vmtparam <ParamName> <ParamValue>]
                if -vtex was specified, passes the parameters to that process.
                Used to add parameters to the generated .vmt file
        -BaseDir <basedir>
        -game <basedir>
                Specifies where the root mod directory is.
        -WadFile <wildcard>
                -wadfile will make (power-of-2) TGAs, VTFs, and VMTs for each
                texture in the WAD. It will also place them under a directory
                with the name of the WAD. In addition, it will create
                .resizeinfo files in the materials directory if it has to
                resize the texture. Then Hammer's File->WAD To Material
                command will use them to rescale texture coordinates.
        -bmpfile <wildcard>
                -bmpfile acts like -WadFile but for BMP files, and it'll place
                them in the root materials directory.
        -sprfile <wildcard>
                Acts like -bmpfile, but ports a sprite.
        -Transparent (BMP files only)
                If this is set, then it will treat palette index 255 as a
                transparent pixel.      -SubDir <subdirectory>
                -SubDir tells it what directory under materials to place the
                final art. If using a WAD file, then it will automatically
                use the WAD filename if no -SubDir is specified.
        -Quiet
                Don't print out anything or wait for a keypress on exit.

ex: xwad.exe -vtex -BaseDir c:\hl2\dod -WadFile c:\hl1\dod\*.wad
ex: xwad.exe -vtex -BaseDir c:\hl2\dod -bmpfile test.bmp -SubDir models\props
ex: xwad.exe -vtex -vmtparam $ignorez 1 -BaseDir c:\hl2\dod -sprfile test.spr -SubDir sprites\props