Cell Transformation:

During transformation, a cell takes in DNA from outside the cell. This external DNA becomes a part of the cells DNA.

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If transfromation is Successful, the recombinant DNA is integratedinto one of the chromosomes of thwe cell.

Genetic Engineering:

Genetic engineering alters the genetic makeup of an organism using techniques that introduce heritable material prepared outside the organism either directly into the host or into a cell that is then fused or hybridized with the host.This involves using recombinant nucleic acid (DNA or RNA) techniques to form new combinations of heritable genetic material followed by the incorporation of that material either indirectly through a vector system or directly through micro-injection, macro-injection and micro-encapsulation techniques.
Genetic Engineering has spurred the growth of biotechnology, a new industry that is changing the way we interact with the living world.