A Material Instance in UE5 is a reusable version of a Material. Think of a Material as a parent that spawns child instances, each capable of adjusting specific properties like color, textures, intensity values for Roughness, Normal Map and much more.
Material Instances are:
You will be using Material Instances a lot when creating environments in UE5.
Now this tutorial assumes you have the basics down for using the standard Material Editor. So make sure you've seen this UE5 Material Editor Crash Course tutorial to learn the basics of setting up texture samples in the Material Editor.
Inside the Content Browser, find the Material you created that you want to have Material Instances created from.
Right-click the Material and select Create Material Instance then name it:
Use the prefix MI_ (for Material Instance) to keep assets organized.
Open the Material Instance by double-clicking on it, this opens up Material Instance Editor. Initially, no editable properties will appear because no parameters are defined in the Material.
To make textures editable in the Material Instance, you need to convert Texture Sample nodes in the Material into parameters.
Right-click on the Base Color texture sample node the node and select Convert to Parameter then name it such as Base Color:
Repeat for the Roughness and Normal Map Texture Samples, naming them Roughness Texture and Normal Map Texture.
Click Apply in the Material Editor to save the changes. The parameters are now exposed in the Material Instance.
Enable each parameter by checking the box next to it, allowing you to swap textures without altering the main Material:
Drag the Material Instance from the Content Browser onto the mesh in the level to assign it.
You can also do this in the Static Mesh Editor to make the Material Instance be the default to appear on every instance of Static Meshes being used.
Assign this new Material Instance onto a Static Mesh and check inside the level:
You've now created and applied your first Material Instance in UE5, with parameters for Base Color, Roughness and Normal Map textures. To go deeper, check out comprehensive "UE5 Master Material Creation" tutorial course.
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