Ensuring shadows work with translucent or alpha based materials
Alpha channels are often used to control opacity (of leaves, hair, dirt in windows, or decals). The use of a simple square card, or sprite, to render the complexity of a leaf or a tuft of fur is highly efficient. Getting a 'hair' shadow off a card with translucency isn't hard but there are some limitations to be aware of in UDK, particularly to do with whether you are rendering a shadow off of a moving or static object, or if you want to have moving lights in the scene. Light from Material Emissive channels doesn't really give a detailed result when casting shadows derived from a Texture Sample node's Alpha output. Light from the DominantDirectionalLight type also won't readily produce a good alpha shadow because it must be masked.
To make the translucent Materials cast dynamic shadows as masked Materials, set the Material's Cast Lit Translucency Shadow As Masked property to true and set the Opacity Mask Material parameter
—UDN...