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Horizontal gene transfer (HGT), also Lateral gene transfer (LGT), is any process in which an organism transfers genetic material to another cell that is not its offspring. By contrast, vertical transfer occurs when an organism receives genetic material from its ancestor, e.g. its parent or a species from which it evolved. Most thinking in genetics has focussed on the more prevalent vertical transfer, but there is a recent awareness that horizontal gene transfer is a significant phenomenon. Artificial horizontal gene transfer is a form of genetic engineering.
"Increasingly, studies of genes and genomes are indicating that considerable horizontal transfer has occurred between prokaryotes."  Horizontal gene transfer is called by some "A New Paradigm for Biology "  and emphasised by others as an important factor in "The Hidden Hazards of Genetic Engineering". "While horizontal gene transfer is well-known among bacteria, it is only within the past 10 years that its occurrence has become recognized among higher plants and animals. The scope for horizontal gene transfer is essentially the entire biosphere, with bacteria and viruses serving both as intermediaries for gene trafficking and as reservoirs for gene multiplication and recombination (the process of making new combinations of genetic material)." .
Horizontal gene transfer is common among bacteria, even very distantly-related ones. This process is thought to be a significant cause of increased drug resistance; when one bacterial cell acquires resistance, it can quickly transfer the resistance genes to many species. Enteric bacteria appear to exchange genetic material with each other within the gut in which they live. There are three common mechanisms for horizontal gene transfer:
- Transformation, the genetic alteration of a cell resulting from the introduction, uptake and expression of foreign genetic material (DNA or RNA). This process is relatively common in bacteria, but less common in eukaryotes. Transformation is often used to insert novel genes into bacteria for experiments, or for industrial or medical applications. See also molecular biology and biotechnology.
- Transduction, the process in which bacterial DNA is moved from one bacterium to another by a bacterial virus (a bacteriophage, commonly called a phage).
- Bacterial conjugation, a process in which a living bacterial cell transfers genetic material through cell-to-cell contact.
Analysis of DNA sequences suggests that horizontal gene transfer has also occurred within eukaryotes, from their chloroplast and mitochondrial genome to their nuclear genome. As stated in the endosymbiotic theory, chloroplasts and mitochondria probably originated as bacterial endosymbionts of a progenitor to the eukaryotic cell. Horizontal transfer of genes from bacteria to some fungi, especially the yeast Saccharomyces cerevisiae has been well documented. There is also recent evidence that the adzuki bean beetle has somehow acquired genetic material from its (non-beneficial) endosymbiont Wolbachia; however this claim is disputed and the evidence is not conclusive.
"Sequence comparisons suggest recent horizontal transfer of many genes among diverse species including across the boundaries of phylogenetic "domains". Thus determining the phylogenetic history of a species can not be done conclusively by determining evolutionary trees for single genes." 
Horizontal gene transfer is a potential confounding factor in inferring phylogenetic trees based on the sequence of one gene. For example, given two distantly related bacteria that have exchanged a gene, a phylogenetic tree including those species will show them to be closely related because that gene is the same, even though most other genes have substantially diverged. For this reason, it is often ideal to use other information to infer robust phylogenies, such as the presence or absence of genes, or, more commonly, to include as wide a range of genes for phylogenetic analysis as possible.
For example, the most common gene to be used for constructing phylogenetic relationships in prokaryotes is the 16s rRNA gene, since its sequences tend to be conserved among members with close phylogenetic distances, but variable enough that differences can be measured. However, in recent years it has also been argued that 16s rRNA genes can also be horizontally transferred. Although this may be infrequent, validity of 16s rRNA-constructed phylogenetic trees must be reevaluated.
Biologist Gogarten suggests "the original metaphor of a tree no longer fits the data from recent genome research" therefore "biologists [should] use the metaphor of a mosaic to describe the different histories combined in individual genomes and use [the] metaphor of a net to visualize the rich exchange and cooperative effects of HGT among microbes." 
"Using single genes as phylogenetic markers, it is difficult to trace organismal phylogeny in the presence of HGT [horizontal gene transfer]. Combining the simple coalescence model of cladogenesis with rare HGT [horizontal gene transfer] events suggest there was no single last common ancestor that contained all of the genes ancestral to those shared among the three domains of life. Each contemporary molecule has its own history and traces back to an individual molecule cenancestor. However, these molecular ancestors were likely to be present in different organisms at different times." 
Uprooting the Tree of Life by W. Ford Doolittle (Scientific American, February 2000, pp 72-77) contains a discussion of the Last Universal Common Ancestor, and the problems that arose with respect to that concept when one considers horizontal gene transfer. The article covers a wide area - the endosymbiont hypothesis for eukaryotes, the use of small subunit ribosomal RNA (SSU rRNA) as a measure of evolutionary distances (this was the field Carl Woese worked in when formulating the first modern "tree of life", and his research results with SSU rRNA led him to propose the Archaea as a third domain of life) and other relevant topics. Indeed, it was while examining the new three-domain view of life that horizontal gene transfer arose as a complicating issue: Archaeoglobus fulgidus is cited in the article (p.76) as being an anomaly with respect to a phylogenetic tree based upon the encoding for the enzyme HMGCoA reductase - the organism in question is a definite Archaean, with all the cell lipids and transcription machinery that are expected of an Archaean, but whose HMGCoA genes are actually of bacterial origin.
Again on p.76, the article continues with:
- "The weight of evidence still supports the likelihood that mitochondria in eukaryotes derived from alpha-proteobacterial cells and that chloroplasts came from ingested cyanobacteria, but it is no longer safe to assume that those were the only lateral gene transfers that occurred after the first eukaryotes arose. Only in later, multicellular eukaryotes do we know of definite restrictions on horizontal gene exchange, such as the advent of separated (and protected) germ cells."
The article continues with:
- "If there had never been any lateral gene transfer, all these individual gene trees would have the same topology (the same branching order), and the ancestral genes at the root of each tree would have all been present in the last universal common ancestor, a single ancient cell. But extensive transfer means that neither is the case: gene trees will differ (although many will have regions of similar topology) and there would never have been a single cell that could be called the last universal common ancestor.
- "As Woese has written, 'the ancestor cannot have been a particular organism, a single organismal lineage. It was communal, a loosely knit, diverse conglomeration of primitive cells that evolved as a unit, and it eventually developed to a stage where it broke into several distinct communities, which in their turn became the three primary lines of descent (bacteria, archaea and eukaryotes)' In other words, early cells, each having relatively few genes, differed in many ways. By swapping genes freely, they shared various of their talents with their contemporaries. Eventually this collection of eclectic and changeable cells coalesced into the three basic domains known today. These domains become recognisable because much (though by no means all) of the gene transfer that occurs these days goes on within domains."
- Endogenous retrovirus
- Rhizome (philosophy)
- This article points out that one dramatic claim of horizontal gene transfer - in which a distinguished group of scientists claimed that bacteria transferred their DNA directly into the human lineage - was simply wrong. Steven L. Salzberg, Owen White, Jeremy Peterson, and Jonathan A. Eisen (2001) "Microbial Genes in the Human Genome: Lateral Transfer or Gene Loss?" Science 292, 1903-1906.  (Free full article)
- This article seeks to shift the emphasis in early phylogenic adaptation from vertical to horizontal gene transfer. Woese, Carl (2002) "On the evolution of cells", PNAS, 99(13) 8742-8747.  (Free full article)
- This article gives convincing evidence of horizontal transfer of bacterial DNA to Saccharomyces cerevisiae "Contribution of Horizontal Gene Transfer to the Evolution of Saccharomyces cerevisiae." Hall C, Brachat S, Dietrich FS. Eukaryot Cell 2005 Jun 4(6):1102-15. 
- This article gives evidence, but does not conclusively prove, that Wolbachia DNA is in the azuki bean beetle genome (a species of bean weevil). Natsuko Kondo, Naruo Nikoh, Nobuyuki Ijichi, Masakazu Shimada and Takema Fukatsu (2002) "Genome fragment of Wolbachia endosymbiont transferred to X chromosome of host insect", Proceedings of the National Academy of Sciences of the USA, 99 (22): 14280-14285".  (Free full article)
- This article proposes using the presence or absence of a set of genes to infer phylogenies, in order to avoid confounding factors such as horizontal gene transfer. Snel B, Bork P, Huynen MA (1999) "Genome phylogeny based on gene content", Nature Genetics, 21(1) 66-67. 
- Webfocus in Nature with free review articles 
- Uprooting the Tree of Life by W. Ford Doolitte (Scientific American, February 2000, pp 72-77)
- Horizontal Gene Transfer - A New Paradigm for Biology
- Horizontal Gene Transfer (page 334 of Molecular Genetics by Ulrich Melcher)
- Report on horizontal gene transfer by Mae-Wan Ho, March 22, 1999
- Recent Evidence Confirms Risks of Horizontal Gene Transfer
- Horizontal Gene Transfer at sciences.sdsu.edu
- Horizontal gene transfer among genomes: The complexity hypothesis Vol. 96, Issue 7, 3801-3806, March 30, 1999 of The National Academy of Sciences
- PDF article on Horizontal Gene Transfer
- The New Yorker, July 12, 1999, pp. 44-61 "Smallpox knows how to make a mouse protein. How did smallpox learn that? 'The poxviruses are promiscuous at capturing genes from their hosts,' Esposito said. 'It tells you that smallpox was once inside a mouse or some other small rodent.'"
- Retrotransfer or gene capture: a feature of conjugative plasmids, with ecological and evolutionary significance
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