First, you really need to keep in mind that it's never impossible to reverse-engineer something. Everything is hackable. A smart developer using a smart IDE can already get far enough.
Well, you can find here a list. ProGuard is pretty good. I've used it myself, but only to "minify" Java code.
If a computer can run it, a suitably motivated human can reverse-engineer it.
Check out my article Protect Your Java Code - Through Obfuscators And Beyond [Archived] for a discussion of obfuscation vs three other ways to make the reverse engineering of your apps more expensive, and a collection of links to tools and further reading materials.
I think that Proguard is the best. It is also possible to integrate it with your IDE (for example NetBeans). However, consider that if you obfuscate your code it could be difficult to track problems in your logs..
As said elsewhere on here, proguard is good, but what might not be known is that there is also a third-party maven plugin for it here http://pyx4me.com/pyx4me-maven-plugins/proguard-maven-plugin/...I've used them both together and they're very good.
I used Allatori and it did its job pretty well.
It is true that it is always possible to reverse engineer some code, just like it is impossible to protect a house in order so nobody can ever steal from it. That does not keep me from locking the door, though. Actually, I am not in the java world, I use BitHelmet for .net.
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