Blog Post with Full Text Tutorial and Notes: http://www.worldofleveldesign.com/categories/udk/udk-material-editor-beginner-basics.php
Material Editor is an important element of UDK environment creation. It is where you will create and edit materials that will be used to texture your environment.
This is an introduction to UDK Material Editor before we get into more detail on how to import your own textures and create your own materials.
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UDK: Material Editor Beginner Basics [Tutorial #23] | NatokHD