Transmuting is the art of breaking down unused items into components; the results are used to make Adornments. Any Adorner will need components created by a Transmuter. As of Game Update 55 only Adorners can make adornments.
All characters are "born" with the ability to Transmute, but it must be skilled up. Open your Knowledge Book (Press K) and look for the Transmuting skill icon. To transmute items, click the icon and mouseover items. Your mouse will turn blue if an item can be transmuted. NOTE: this cannot be undone!! The item is changed forever.
Transmuting may yield four different results, all of which are used to make Adornments. There is a rare chance of getting both the rare and common results on a Transmute. The odds of a particular results are 80% chance of the common result, 20% chance of the rare result, and a 5% chance you'll get both.
|Lapiz Lazuli Fragment
|Infusion of Earth
|Infusion of Air
|Infusion of Fire
|Infusion of Water
|Infusion of Nightmares
|Infusion of Daydreams
|Infusion of Illusion
|Infusion of Reality
|Infusion of the Void
|Infusion of Ice
|Infusion of Scale
To transmute an item, use the Transmute skill (which is now found in your Knowledge Book) and your mouse arrow will now glow blue around the edges. Mouse over an item that you wish to destroy and, if the cursor stays blue, you can transmute it. Click on the item and you will receive a confirmation box asking if you are sure that you want to transmute the item. On confirmation there will be a progress bar to watch and about 2 seconds later the item will disappear and a component will appear in your inventory.
Transmuting cannot utilize the commission system, but if you group with your Transmuter and are in the same zone, you will see the results.
Unlike the primary Tradeskills, Transmuting is skill based; your skill cap is determined by your Adventuring or Tradeskilling level, whichever is higher. The formula to calculate your current skill cap is ((Level * 5)+ 5). You can see your skill and its cap in the Character window under the Tradeskill tab.
You level up by breaking down items with your Transmuting skill.
Your skill determines what level items you can transmute. It doesn't effect your results.  It will also affect your chance of a skillup, which bottoms out at a 25% chance when transmuting items well below your skill level.
Since Transmuters no longer craft Adornments, there are no longer any crafting skills to go with it.
Yes, but no one said you have to use it! With Sentinel's Fate everyone can be a Transmuter, Tinkerer, or Adorner at the same time.
With Sentinel's Fate Transmuting becomes a skill that all characters have innately. It is still used to break down unwanted stuff to create materials for Adornments. The skill starts at 3 and is raised by using it. Raising the skill by transmuting now works all the way to the maximum level, capped by the higher of your two levels, Adventure or Tradeskill.
The skill of creating adornments is now called Adorning, it has to be trained by talking to an Adorning Trainer on Butcherblock dock or in Kelethin. Your skill is raised by creating adornments. Your maximum skill is capped by the higher of your two levels, Adventure or Tradeskill.
The nine primary tradeskill classes are no longer be able to make Adornments.
Any existing "Enigma of the (anything but transmuting)" recipe books disappeared with Sentinel's Fate. Non-adornment recipes in these books are being moved to other books. Existing adornments will not disappear, although there may be a few stat or slot changes to some to ensure they aren't overpowered or imbalanced with the new ones coming (if the slot on the adornment changes and no longer works with what item it's on, it should pop off your armor and return to your inventory so you can apply it to something else if you wish). 
|ZAM credits this article at EQ2 Traders Corner for some of the info in this article.