This new feature in AutoCAD 2016 is by far my favorite.
Here is the scenario:
Your drawing (electrical) references two other discipline’s drawings (Structural & Mechanical)
The problem comes when you print your drawing. Your electrical content is hard to differentiate from the other discipline’s. If the other disciplines used their layers “BYLAYER” you could easily change how they display in your drawing.
But since some of their layer colors have been “overridden” meaning that someone changed the color from “BYLAYER” to something else. It is difficult to get the desired result for your drawing without having to open their drawing…
With AutoCAD 2016, you can easily see what layers are in you drawing vs what layers belong to the XREFs both in the Layers “Properties Palette” and in the “Layers Dropdown” (both shown below)
Here is the great part!! You can now control those overridden layers by changing a brand new “System Variable” named XREFOVERRIDE and it is basically a toggle. So:
- <0> = off (default)
- <1> = on
Here is the more in depth description from the System Variables editor:
Controls the display of object properties on referenced layers.
- 0 (zero) When the properties of the objects (such as color, linetype, linewidth, transparency, or plot style) on the external reference drawing are set to ByLayer, any changes to the xref layer properties are displayed in the current drawing (legacy behavior)
- 1 When the visual properties of the objects on the external reference drawing are not set to ByLayer, objects on xref layers are treated as if their properties are set to ByLayer and every external reference layer can have its own set of layer overrides
Note: The XREFOVERRIDE system variable only applies to DWG xrefs, not to other references such as underlays.
AutoCAD Tips 
Dear Sir,
Thanks for the information regarding the xrefoverride.
I have one query regarding the binding process of the xref files with xrefoverride=1
Currently when i bind the xref, it changes back to the display as xrefoverride=0. Please assist me on this. Thank you.
This is the correct functionality for binding the XREF into the drawing. The XREFOVERRIDE command is just a control for current XREFs so that you have control over how they appear when they are XREFs. Once the XREF is bound is bound into your drawing, what was once XREFed layers are now a part of your drawing included with the rest of your current drawing’s layers and will therefore need to be handled in the Layer Properties Manager.
Keep in mind that this system variable/tool was included so that we could finally have control over XREF layers that have overrides applied to them and nothing more.
Thank you sir, You made the point clear.
Dear Sir,
Is there any setting to be set up before I type xrefoverride? I follow your instruction but there’s no difference when I set xrefoveride with ‘0’ or ‘1’. I am using AutoCAD 2016.
Thanks for your help
Simply changing the setting for XREFOVERRIDE wont change the layers of the XREF.
You do need to open the Layer Manager and select the layers of the XREF and then set them to the color that you want them to display. Are you doing that?
Dear Sir,
Thank you very much about that important command , but when i set xrefoveride from ‘0’ to ‘1’ it’s made problem with all other xref used text mask
Yes I have had that problem too. Most annoying. I certainly hope that Autodesk will fix this problem.