Within the XSLT stylesheet declare global parameters e.g.
  <xsl:param name="arg1" />
or if you want a defaut value e.g.
  <xsl:param name="arg1" select="'value 1'" />
Then in your Java code you can use the setParameter method e.g.
  transformerInstance.setParameter(
    "arg1",
    "value 2"
  );
to set the parameter before you do the transformation.

Within the stylesheet code you can then use $arg1 to access the
parameter value.