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Reverse engineering is a process by which players break down crafted and sometimes other items into their basic components, returning some of the materials used, and giving them a chance to learn the schematic for an improved version of the item. Items created by reverse-engineered schematics often give additional attributes, but require additional materials, often acquired by mission skills. To reverse engineer an item, open the Inventory panel, click on the Reverse Engineering button in the top-right corner, and then right-click on the item.
However, reverse engineering may only be done in certain areas. Areas where enemies spawn or other hostiles will cause the reverse engineering button to not display.