This document discusses how to transform an XML payload into another XML format using XSLT in Mule. It provides an example of taking an input XML payload with two elements, name and id, and transforming it to an output XML payload with an additional element, designation. The transformation is done with an XSLT file that is referenced in the Mule flow. The flow accepts the input XML, sets a designation variable, runs the payload through the XSLT transformer, and produces the transformed output XML payload.