The process has CHANGED for transferring characters from iClone to Unreal as of Unreal 5.5.

Bottom line: You CANNOT import characters into Unreal with ‘Import Animations’ enabled – it will screw up all your morphs. You must instead follow a process of first importing the character without animation, then importing ONLY the animation with no skeletal mesh.

I’ve typed up the process below, but here’s the official video explanation from Reallusion from January 2025:

Step by step process (typed up from video)

1. Export your character from iClone as an FBX:
   • In iClone, select your character in your scene
   • Go to FILE > EXPORT > FBX
   • Change the preset to UNREAL
   • Set the animation to ALL (not ‘current frame’) so that your animation is included
   • Make sure ‘include textures’ is OFF
   • Export the fbx
2. If you have NOT already installed AUTO SETUP into your Unreal project (I know this makes no sense – but its what the video explanation says):
   • In Unreal, go to EDIT > PLUGINS
   • Search for INTERCHANGE
   • Disable all related plugins (ie. all plugins with the name INTERCHANGE in them)
     
   • Restart Unreal.
3. In the CONTENT BROWSER, right click, and choose IMPORT
4. Select the FBX (the one with your character and animation from iClone)
5. In the popup:
   • Turn on the checkbox for “Enable Character Creator & iClone Auto Setup”
   • Change the Shader Type to HQ Shader
     
   • Click OK
6. In the next popup:
   • Turn on SKELETAL MESH
   • Enable IMPORT MESH
   • Enable ADVANCED > USE TO AS REF POSE
   • Enable ADVANCED > IMPORT MORPH TARGETS
   • Scroll down, and TURN OFF the “Import Animations” option. This is vital, otherwise the morphs will import incorrectly.
   • Click IMPORT.
7. Now check that the morphs have imported correct.
   • In the Content Browser, double click on the Skeletal Mesh.
   • In the window that pops up, click on the MORPH TARGET PREVIEW tab.
   • Adjust a facial morph, and make sure it looks ok in the viewport.
   • Click the AUTO checkbox next to the morph slider you changed, to reset its position.
   • Close the popup editor window.
8. Now import the animation.
   • In the CONTENT BROWSER, it’s vital that you create a new folder. Do NOT import into into the same folder. Make a new folder called “ANIMATION” or something like that, and open it up.
   • Right click inside your new ANIMATION folder, and choose IMPORT
   • Select the same FBX (the one with your character and animation from iClone)
   • In the popup:
     • Disable “IMPORT MESH”
     • Change the SKELETON dropdown to be your already-imported character
     • Change the ANIMATION LENGTH dropdown to ANIMATED TIME (this will crop out static frames)
     • Click IMPORT
9. Now test the animation.
   • Drag your SKELETAL MESH to the viewport (ie. into the scene) DO NOT DRAG THE ANIMATION BLUEPRINT INTO THE SCENE. IT WILL NOT WORK.
   • In the content browser, right click and go CINEMATICS > LEVEL SEQUENCE.
   • Drag the skeletal mesh from the Outliner to the Sequencer.
   • In the Sequencer, next to ANIMATION, click the plus icon, and select the imported animation.
   • Play back the animation to see the results.