How do I fix?
Tried changing with the transformation button but still get this error-
Editing data where the layer is in a different projection from the data frame is probably not ideal but isn't necessarily a problem. See About editing data in a different projection for more information. Doing nothing and going ahead with your editing is an option.
If you want to match the data frame coordinate system to the coordinate system of the layers (assuming your layers are all in the same cs), you can do this, as Robert mentioned, on the Coordinate System tab of the Data Frame Properties dialog box.
This should remove the Start Editing warnings you see. Robert cautioned that this method does not always seem to work, but I've never known it not to work. I would try it before rebuilding your mxd.
The best way to fix it is to make a new MXD. You can try to fix it in the Coordinate system tab but that does not seem to always work.
Export all your features as a layer file. Start a new mxd. Add one item that is in the desired projection. A feature that is not part of the layer files. Add your layer files back in and remove the first feature.
You MXD frame will now be in your desired projection.
Thanks Tim & Robert
Appreciate the help!
Retrieving data ...