The site must be configured to Show documents preview.
To view a document preview, follow one of these methods:
Right-click the document and select Show Preview.
Hover over the document and click the Show Preview link in the tooltip that opens.
To pin the dialog, check Keep preview window open. When the dialog is not pinned, it closes when you view another window.
When previewing email messages (.msg), if there is no preview data available for the message, click the Create Preview button. This adds a new version for the message, with preview data. You must have write permissions for this document to add preview data. The Open Message link that appears at the top, downloads the message from SharePoint and opens it in Outlook.
To view and edit Office documents:
Double click the document, or right-click it and select Open. By default, Office documents are opened with Microsoft Office.
You can open Office documents on SharePoint 2010 or later with Office Online, if enabled on the site.
When you open items of the content type Link to a Document (marked with a link icon overlayed on the type icon: ), the linked document is opened.
You can edit the document directly, and any changes you make are immediately saved to the server. You can also use the built-in SharePoint collaboration features in Microsoft Office applications, such as Check In and Check Out.
The supported document types that can be opened with Office Online are Word, Excel, PowerPoint and OneNote documents. If you are working with a SharePoint 2010 server, Office Online must be installed on the server.
If the SharePoint site is configured with Forms authentication, you will not be able to edit the Office documents directly. In this case, a temporary copy of the document opens, and you must save it locally and then upload it to the server after editing. To learn how, read Editing local copies of documents below.
To view and edit non-Office documents:
When you open a non-Office document, a temporary copy of the file opens. Changes to this file are not saved on the server. To force applications to open the SharePoint document directly (instead of opening a local copy), right-click it and select Edit.
The Edit menu option is not available for Microsoft Office documents.
The Edit menu option is not available when connected to a SharePoint site using custom credentials. In this case, you should edit a local copy of the document as explained below.
To edit local copies of documents:
In the following scenarios you cannot edit a document directly on the SharePoint server:
If you are connected to the SharePoint site using custom credentials and you want to edit a non-Office document.
If the application associated with the document you want to edit does not support UNC paths.
In these cases, you should edit a local copy of the document. Download the document to your computer. When you are ready to commit your changes, upload the document back to the server by dragging it to the sidebar or by selecting the Upload toolbar button. Since an earlier version of the document already exists on the server, you are prompted to replace the document or to add a new version of the document to the SharePoint library (depending on your library versioning settings).