The term "transmutation" refers to the situation where non-marital property is slowly converted into marital property during a marriage.1 There is no remaining right of reimbursement, the nature of the property (marital vs. non-marital) is transmuted entirely. The law works both ways, too; martial property can be transmuted into non-marital property in a number of ways. In fact, at least one case concluded that one spouse's non-marital property could be transmuted into the other spouse's non-marital property.2
Consider, for example, the situation where one spouse buys a house just before the marriage, makes all the mortgage payments over the next twenty years, but both spouses live in the house after the marriage. Although the house was purchased prior to the marriage, only a small portion of it is really non-marital. All of the mortgage payments, and the corresponding increase in equity, were made during the marriage with, presumably marital property. As these marital funds were applied to a non-marital asset, the asset slowly took on a marital character with each monthly payment. The home in this example was transmuted from non-marital property into marital property.
The transmutation doesn't have to involve just money, either – manual labor is, in some cases, capable of transmuting an asset from marital property to non-marital (or vice-versa).