Genetic transfer occurs when genetic information is passed from one organism to another. It occurs via two mechanisms: vertical gene transfer and horizontal gene transfer. Vertical gene transfer occurs when genetic information is transferred from one generation to the next, which happens much more frequently than horizontal gene transfer. Both sexual and asexual reproduction are forms of vertical gene transfer, where one or more organisms pass some or all of their genome onto their progeny. Additionally, vertical gene transfer occurs in both prokaryotic and eukaryotic species.

Horizontal gene transfer occurs when genetic information is passed to a member of the same generation and happens most frequently in prokaryotic species. While inter-species horizontal gene transfer is exceedingly rare among eukaryotes, it occurs frequently in prokaryotes. Horizontal gene transfer between different species is a significant source of genetic diversity among prokaryotes.

Most prokaryotic species reproduce asexually. While this allows for faster production of offspring, the offsprings produced possess limited genetic diversity. Horizontal gene transfer, therefore, serves a vital role in introducing genetic diversity to prokaryotes. Through horizontal gene transfer, prokaryotes can share a small fraction of their genome with other organisms, either conspecific (the same species) or allospecific (a different species), in the same generation. Many scientists posit that horizontal gene transfer and mutation are the most significant sources of genetic variation in prokaryotes. Thus, horizontal gene transfer provides some of the raw material upon which natural selection acts.

A prominent example of this is the emergence of antibiotic-resistant strains of bacteria. Genes that confer resistance to an antibiotic can be transferred between different species and strains of bacteria, giving the recipient bacteria a selective advantage, such as penicillin-resistant strains of Neisseria gonorrhoeae, which causes gonorrhea. On an even grander scale, some estimates suggest that at least 18% of E. coli’s genome was acquired via horizontal gene transfer over the course of millions of years of evolution.