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Transd​uction:

The transfer of bacterial genes from one cell to another by packaging in a phage particle

Or

The transfer of bacterial genes by a virus

In transduction, the bacterial genes are incorporated into the phage capsid. The virus containing these bacterial genes then injects them into another bacterium, thus completing the transfer.

It is the most common method used for gene transfer and recombination in bacteria.

Transformation:

It is the uptake of naked DNA fragment by a cell from the surrounding medium and its incorporation into the recipient chromosome in heritable form. 

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