(see The net of life: Reconstructing the microbial phylogenetic networkV. Kunin, L. Goldovsky, N. Darzentas, and C. A. OuzounisGenome Res. 1 July 2005. pdf)
Three mechanisms of horizontal (lateral) gene transfer are recognized: direct bacterial conjugation, bacteriophage mediated transduction between bacteria, and bacterial transformation by uptake of DNA fragments.
A major form of vertical gene transfer followed serial endosymbiotic events, in which ingested purple bacteria and Cyanobacteria became eukaryotic mitochondria and chloroplasts respectively. The ingested prokaryotes are believed to have relinquished certain genes to the nuclei of their host cells, a process known as endosymbiotic gene transfer.
Horizontal genomics is a new field in prokaryotic biology that examines DNA sequences in prokaryotic chromosomes that appear to have originated from other prokaryotes or eukaryotes. The prokaryotic mobile gene pool is referred to as the 'mobilome'. Various agents agents occur in all prokaryotes and effect DNA movement: plasmids, bacteriophages and transposons.