How to replace existing value of ArrayList element in Java

Use the set method to replace the old value with a new one.

list.set( 2, "New" );

If you are unaware of the position to replace, use list iterator to find and replace element ListIterator.set(E e)

ListIterator<String> iterator = list.listIterator();
while (iterator.hasNext()) {
     String next = iterator.next();
     if (next.equals("Two")) {
         //Replace element
         iterator.set("New");
     }
 }