The process for upgrading legendary weapons has changed in the Taken King. There is no option in your inventory anymore, instead you have to use the new Exotic Blueprint system which was introduced with Patch 2.0.

The exotic blue print controls can be found in the main central chamber of the tower and look like large blue computer screens on the wall.  These screens keep track of all of the exotic weapons and armor in the game, and reveal which ones you have unlocked so far.

Once unlocked, exotic weapons can be crafted here (for 2500 glimmer and an exotic shard), meaning you can disassemble anyone items you aren’t using at the moment without fear of losing them forever. Gone are the days of farming multiple exotics, now you only need to get one and its unlocked permanently for you.

Upgrading Year 1 Exotics

Exotic blueprints not only keep track of your exotic inventory, they also allow you to upgrade your Year 1 Exotic Weapons and Armor to Year 2 levels. Simply select your exotic weapon from the list and if it’s eligible for upgrade you’ll have the option to spend 125 legendary marks (armor) or 150 legendary marks (weapon) to upgrade it to year two levels.

The item will automatically be upgraded in your inventory and any future copies of the weapon you make from the blueprints will be at the new 2 year stats.

Some Exotics are not eligible to be upgraded like the Icebreaker and the Gjallahorn. Legendary weapons and armor also cannot be upgraded and are locked to their year 1 figures.

Legendary Marks are the new currency system that replaces the Vanguard Marks and Crucible Marks. You can get them form completing certain Vanguard and Crucible game types, but not all. If a game mode rewards Legendary Marks it will display it under the rewards section when you hover over it in the navigation screen.