use warnings;
use strict;
use XML::Twig;

my $xmlstr = '<XML> <TestElement>Hello</TestElement> </XML>';
my $twig = XML::Twig->new(twig_handlers => {'XML/TestElement' => sub {$_->set_text('Bye')} });
$twig->parse($xmlstr);
$twig->print();

__END__

<XML> <TestElement>Bye</TestElement> </XML>