This document discusses using XSLT to transform XML payloads in Mule applications. It provides an example of transforming an input XML payload containing name and id elements to an output XML payload that adds a designation element. The Mule flow uses an XSLT transformer applied to the input XML, along with an XSL stylesheet, to produce the modified output XML payload. Testing the flow by deploying it and sending a request demonstrates how XSLT can easily transform XML payloads in Mule.