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 focused on the more prevalent vertical transfer, but there is a recent awareness that horizontal gene transfer is a significant phenomenon.
Horizontal gene transfer was first described in Japan in a 1959 publication that demonstrated the transfer of antibiotic resistance between different species of bacteria. However, the significance of this research was not appreciated in the west for another ten years. Michael Syvanen was among the earliest western biologists to explore the potential significance of lateral gene transfer. Syvanen published a series of papers on horizontal gene transfer starting in 1984 , predicting that lateral gene transfer exists, has biological significance, and is a process that shaped evolutionary history from the very beginning of life on earth. Artificial horizontal gene transfer is a form of genetic engineering.
As Jain, Rivera and Lake (1999) put it: "Increasingly, studies of genes and genomes are indicating that considerable horizontal transfer has occurred between prokaryotes." (see also Lake and Riveral, 2007). The phenomenon appears to have had some significance for unicellular eukaryotes as well. As Bapteste et al. (2005) observe, "additional evidence suggests that gene transfer might also be an important evolutionary mechanism in protist evolution."
There is some evidence that even higher plants and animals have been affected. Dr. Mae-Wan Ho, a noted scientist and critic of genetic engineering, writes: "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)." But Richardson and Palmer (2007) are more cautious: "Horizontal gene transfer (HGT) has played a major role in bacterial evolution and is fairly common in certain unicellular eukaryotes. However, the prevalence and importance of HGT in the evolution of multicellular eukaryotes remain unclear."
Due to the increasing amount of evidence suggesting the importance of these phenomena for evolution (see below), molecular biologists such as Peter Gogarten have described horizontal gene transfer as a "A New Paradigm for Biology".
It should also be noted that the process is emphasised by Dr. Mae-Wan Ho as an important factor in "The Hidden Hazards of Genetic Engineering", as it may allow dangerous transgenicDNA (which is optimised for transfer) to spread from species to species.
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.
There is also recent evidence that the adzuki bean beetle has somehow acquired genetic material from its (non-beneficial) endosymbiont Wolbachia.  New examples have recently been reported, demonstrating that Wolbachia bacteria represent an important potential source of genetic material in arthropods and filarial nematodes. 
There is also evidence for horizontal transfer of mitochondrial genes to parasites of the Rafflesiaceae plant family from their hosts (also plants), and from chloroplasts of a not-yet-identified plant to the mitochondria of the bean Phaseolus.
"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 horizontal gene transfer. Combining the simple coalescence model of cladogenesis with rare HGT horizontal gene transfer events suggest there was no single most recent 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."
With regard to how horizontal gene transfer affects evolutionary theory (common descent, universal phylogenetic tree) Carl Woese says:
"What elevated common descent to doctrinal status almost certainly was the much later discovery of the universality of biochemistry, which was seemingly impossible to explain otherwise. But that was before horizontal gene transfer (HGT), which could offer an alternative explanation for the universality of biochemistry, was recognized as a major part of the evolutionary dynamic. In questioning the doctrine of common descent, one necessarily questions the universal phylogenetic tree. That compelling tree image resides deep in our representation of biology. But the tree is no more than a graphical device; it is not some a priori form that nature imposes upon the evolutionary process. It is not a matter of whether your data are consistent with a tree, but whether tree topology is a useful way to represent your data. Ordinarily it is, of course, but the universal tree is no ordinary tree, and its root no ordinary root. Under conditions of extreme HGT, there is no (organismal) "tree." Evolution is basically reticulate."
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There is evidence for historical horizontal transfer of the following genes:
^ Ochiai, K., Yamanaka, T Kimura K and Sawada, O (1959) Inheritance of drug resistance (and its tranfer) between Shigella strains and Between Shigella and E.coli strains. Hihon Iji Shimpor 1861: 34 (in Japanese)
^ Akiba T, Koyama K, Ishiki Y, Kimura S, Fukushima T. On the mechanism of the development of multiple-drug-resistant clones of Shigella. Jpn J Microbiol. 1960 Apr;4:219-27. PMID 13681921.
^ Syvanen, Michael (1985). "Cross-species Gene Transfer; Implications for a New Theory of Evolution". J. Theor. Biol.112. Retrieved on 2007-09-05.
^ Lake, James A. and Maria C. Riveral (1999). "Horizontal gene transfer among genomes: The complexity hypothesis". PNAS (Proceedings of the National Academy of Science)96:7: pp. 3801-3806. Retrieved on 2007-03-18.
^ Lake, James A. and Maria C. Riveral (2004). "The Ring of Life Provides Evidence for a Genome Fusion Origin of Eukaryotes". Nature431 . Retrieved on 2007-03-16.
^ Bapteste et al. (2005). "Do Orthologous Gene Phylogenies Really Support Tree-thinking?". BMC Evolutionary Biology5:33. Retrieved on 2007-03-18.
^ Richardson, Aaron O. and Jeffrey D. Palmer (January 2007). "Horizontal Gene Transfer in Plants". Journal of Experimental Botany58: pp. 1-9 . Retrieved on 2007-03-18.
^ ab Gogarten, Peter (2000). "Horizontal Gene Transfer: A New Paradigm for Biology". Esalen Center for Theory and Research Conference. Retrieved on 2007-03-18.
^ Jeffrey L. Blanchard and Michael Lynch (2000), "Organellar genes: why do they end up in the nucleus?", Trends in Genetics, 16 (7), pp. 315-320. (Discusses theories on how mitochondria and chloroplast genes are transferred into the nucleus, and also what steps a gene needs to go through in order to complete this process.) 
^Hall C, Brachat S, Dietrich FS. "Contribution of Horizontal Gene Transfer to the Evolution of Saccharomyces cerevisiae." Eukaryot Cell 2005 Jun 4(6):1102-15.  The article argues that horizontal transfer of bacterial DNA to Saccharomyces cerevisiae has occurred.
^ 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 argues that Wolbachia DNA is in the azuki bean beetle genome (a species of bean weevil.
^ Hotopp JC, Clark ME, Oliveira DC, Foster JM, Fischer P, Torres MC, Giebel JD, Kumar N, Ishmael N, Wang S, Ingram J, Nene RV, Shepard J, Tomkins J, Richards S, Spiro DJ, Ghedin E, Slatko BE, Tettelin H, Werren JH (30 Aug 2007 [Epub ahead of print]). "Widespread Lateral Gene Transfer from Intracellular Bacteria to Multicellular Eukaryotes". Science. doi:10.1126/science.1142490. PMID 17761848.
^ Charles C. Davis and Kenneth J. Wurdack (30 July 2004). "Host-to-Parasite Gene Transfer in Flowering Plants: Phylogenetic Evidence from Malpighiales". Science305 (5684): 676–678. doi:10.1126/science.1100671.
^ Daniel L Nickrent, Albert Blarer, Yin-Long Qiu, Romina Vidal-Russell and Frank E Anderson (2004). "Phylogenetic inference in Rafflesiales: the influence of rate heterogeneity and horizontal gene transfer". BMC Evolutionary Biology4 (40). doi:10.1186/1471-2148-4-40.
^ Magdalena Woloszynska, Tomasz Bocer, Pawel Mackiewicz and Hanna Janska (November, 2004). "A fragment of chloroplast DNA was transferred horizontally, probably from non-eudicots, to mitochondrial genome of Phaseolus". Plant Molecular Biology56 (5): 811-820. doi:10.1007/s11103-004-5183-y.
Horizontal gene transfer in prokaryotes - article in Citizendium
Horizontal gene transfer in plants - article in Citizendium
History of the study of horizontal gene transfer - article in Citizendium
- Papers by Dr Michael Syvanen on Horizontal Gene Transfer
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 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.
Woese, Carl (2002) "On the evolution of cells", PNAS, 99(13) 8742-8747.  (Free full article) This article seeks to shift the emphasis in early phylogenic adaptation from vertical to horizontal gene transfer.
Snel B, Bork P, Huynen MA (1999) "Genome phylogeny based on gene content", Nature Genetics, 21(1) 66-67. 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.
Webfocus in Nature with free review articles 
Prabhu B. Patil and Ramesh V. Sonti (2004) "Variation Suggestive of Horizonatal Gene Transfer in Xanthomonas oryzae pv. oryzae, the leaf blight pathogen of rice" BMC Microbiology 4:40.
Bioinformatics Vol. 22 no. 21 2006, pages 2604–2611 for a technique to decrease the impact of HGT events on maximum likelihood cladistical analyses.
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
Results of research into horizontal gene transfer Can transgenes from genetically modified plants be absorbed by micro-organisms and spread in this way?