Major New Features

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Production-ready Hair and Fur
The strand-based Hair and Fur system is now production-ready, giving you the ability to simulate and render high-quality hair, fur, and feathers to create believable humans and animals. The system features built-in LOD generation and is compatible with effects such as DOF and Fog. Cards and meshes can be generated in engine for lower-end hardware (Experimental). 
Sky, cloud, and environment lighting (Beta)
Author and render realistic or stylized skies, clouds, and other atmospheric effects with full artistic freedom, with a new Volumetric Cloud component that can interact with Sky Atmosphere, Sky Light, and up to two directional lights. Components can be lit and shadowed dynamically, in line with time-of-day updates in real time.
Water system (Experimental)
Create believable bodies of water within your landscapes with a new Water system that gives you the ability to define oceans, lakes, rivers, and islands using splines. Built-in fluid simulation enables characters and objects to realistically interact with the water; the fluid also responds to Terrain, such as reflecting ripples off the shore, and reacting to river flow maps.

Movie Render Queue enhancements (Beta)

You can now output render passes, including matte IDs, camera motion vectors, Z-depth, ambient occlusion, reflections, and more, from the Movie Render Queue. In addition, there’s now support for OpenColorIO (OCIO), and for exporting multi-channel EXRs, Apple ProRes and Avid DNxHR codecs, and Final Cut Pro XML EDLs, as well as the ability to integrate render farms.

Animation in Sequencer (Beta)

It’s now possible to create animations by blending animation clips (such as motion-captured data) directly in Sequencer, with the ability to preview skeleton animations and match joint placement for a smooth transition between clips. The feature is integrated with Control Rig, which now offers a full-body IK solution (Experimental), in addition to the standard FK/IK.

nDisplay support for large LED volumes (Beta)

We’ve updated nDisplay to enable more pixels to be rendered at a higher frame rate, increasing performance and supporting larger LED volumes with existing hardware. We’ve done this by leveraging capabilities such as NVIDIA’s NVLink technology that can transfer data between two GPUs at very high speed, enabling the rendering load to be split between GPUs.

Collaborative Viewer template enhancements

The Collaborative Viewer template that enables collaborative design reviews on VR/AR/Desktop has received significant usability and performance improvements that enhance the experience and enable more users to join a session. In addition, there is now support for voice communication between participants over VOIP using in-engine peer-to-peer protocols.

Remote Control API and Preset (Beta)

We’ve added the ability to easily collect parameters or function libraries from the Unreal Engine UI into customizable presets that can be used in a panel in the Unreal Editor. These can also be seamlessly connected to widgets—such as radial dials, sliders, or color pickers—in web applications, enabling users to quickly change properties from an external device such as an iPad.

Chaos improvements (Beta/Experimental)

We continue to improve Chaos with the intention of replacing PhysX as the default physics system. Chaos is now available for Rigid Bodies, Cloth, and Ragdolls (Beta), and for Vehicles (Experimental). In addition, constraint positions can now be set explicitly, joint stability for longer chains is improved, and the solver is more stable at lower iteration counts than PhysX. To use Chaos in your projects, you'll need to compile the engine from source.
Release Notes 4.26