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To use the REPLACE function in Excel, start by typing "REPLACE" and then open parentheses. Enter the cell reference of the text you want to modify (e.g., C3), followed by a comma. Next, input the starting character number for replacement (count from left to right, e.g., 3), then a comma for the number of characters to replace. After that, input the new text in quotation marks, close the quotation marks, and then close the parentheses. Press Enter. To apply this to other cells, use the autofill function to copy the formula down.