Upgrading an item will take your current rare item up 10 levels. For example a level 45 weapon to a level 55 weapon. To stop the confusion this will change the item into the item of that level, not just raise its level. Your item must have atleast 12% enchantment on it to attempt upgrading the item.

Beware though. When upgrading an item you can lose enchantment and combine stages. The enchantment lost is based on the enchantment you have when upgrading, the higher your items enchantment, the more you can lose (3% loss is most common). You can also lose half of your current combine stages (If an odd number you round up).Each time you fail an upgrade your jade will be used and your money spent will be lost, however your item has no chance at breaking from a failed upgrade. Successful upgrades randomly change the skill on your item, so you might not always get the skill you want; however, master level upgrades do not change the skills.

Side Note** All master items have +4 on the skill, so the skill will not change to +1/2/3 it will always be +4

In order to upgrade you must have a Red Jade or Purple Jade but Purple Jade has 2% less chance of success (You can trade 2 Purple Jades for a Red Jade at Herb Master). You must also have 100+ Contribution Points (the number by your level on the Character screen). You must then go to the Elder of your faction and click entrance. Once you enter the area head to the lord of your element (Fujins-Shadow, Jinongs-Dark,Guanyins-Light) and select upgrade. Then drag your item you want to upgrade into the box labeled Item and the Red Jade into the box labeled Material and click OK.

Each upgrade costs coins to do; prices are as follows:

Level 45-55 is 100k

Level 55-65 is 200k

Level 65-75 is 300k

Level 75-85 is 400k

Level 85-95 is 500k

Level 95-105 is 600k

Level 105-M2 is 700k

M2-M5 is 800k

M5-M8 is 900k

M8-M11 is 1mil

This pattern continues all the way up to M33.

Again luck effects the chance of a successful upgrade so Garuda's Song is recommended. If you do not have very high luck ask a guild member, GS, or trusted friend with high luck to upgrade for you, also if you do not have 100 Contribution points, I'm sure there is someone you can trust that does.

Side note* Upgrading is usually very hard to do lol, consider to sell your current item and buying a new one of your level.