Verb (1-dan, intransitive)
1. to take the form of (esp. in ref. to a spirit, fox, raccoon dog, etc.); to assume the shape of; to turn oneself into; to transform oneself into
人に化けることができる、化け物だ。It's a monster that can take human form.
2. to disguise oneself (as)
気づいていたのね、うまく化けたつもりだったのに。So you noticed. I thought I'd disguised myself well.
3. to change (into); to transform; to metamorphose
メールの文字が化けて読めない。The text in the email is garbled, so I can't read it.
4. to change radically (for the better); to transform; to improve dramatically and unexpectedly (e.g. of an actor, sportsperson, stock price); to make a complete turnaround
あの子、本当に化けるわよ。That kid is really going to blossom.