What you are looking for is more commonly known as a "Spotlight" effect. You will need to use a JLayer, as this tutorial explains.
Here is the code excerpt from the tutorial:
class SpotlightLayerUI extends LayerUI<JPanel> {
private boolean mActive;
private int mX, mY;
@Override
public void installUI(JComponent c) {
super.installUI(c);
JLayer jlayer = (JLayer)c;
jlayer.setLayerEventMask(
AWTEvent.MOUSE_EVENT_MASK |
AWTEvent.MOUSE_MOTION_EVENT_MASK
);
}
@Override
public void uninstallUI(JComponent c) {
JLayer jlayer = (JLayer)c;
jlayer.setLayerEventMask(0);
super.uninstallUI(c);
}
@Override
public void paint (Graphics g, JComponent c) {
Graphics2D g2 = (Graphics2D)g.create();
// Paint the view.
super.paint (g2, c);
if (mActive) {
// Create a radial gradient, transparent in the middle.
java.awt.geom.Point2D center = new java.awt.geom.Point2D.Float(mX, mY);
float radius = 72;
float[] dist = {0.0f, 1.0f};
Color[] colors = {new Color(0.0f, 0.0f, 0.0f, 0.0f), Color.BLACK};
RadialGradientPaint p =
new RadialGradientPaint(center, radius, dist, colors);
g2.setPaint(p);
g2.setComposite(AlphaComposite.getInstance(
AlphaComposite.SRC_OVER, .6f));
g2.fillRect(0, 0, c.getWidth(), c.getHeight());
}
g2.dispose();
}
@Override
protected void processMouseEvent(MouseEvent e, JLayer l) {
if (e.getID() == MouseEvent.MOUSE_ENTERED) mActive = true;
if (e.getID() == MouseEvent.MOUSE_EXITED) mActive = false;
l.repaint();
}
@Override
protected void processMouseMotionEvent(MouseEvent e, JLayer l) {
Point p = SwingUtilities.convertPoint(e.getComponent(), e.getPoint(), l);
mX = p.x;
mY = p.y;
l.repaint();
}
}
I suggest reading the entire tutorial on Swing so you understand how listeners work and basically how this entire code works.