Navigate to Configuration>Email - there you can choose either "Customer Templates" or "Agent Templates". Customer Templates are email templates used in emails delivered to the customer. Agent Templates are email templates used in emails delivered to the agent.
If you want to edit a template, click on the edit link.
In the edit window that opens you can edit an email template. You can use variables from the right sidebar and define if quoted text shall be shown or not when an agent replies to a customer.
After you are finished with editing a template click the Save button.
Email templates Text Setup
If you prefer text with screenshots instructions over video, see Email templates setup guide.