In Bacillus subtilis strains 168 and W23 the specificity requirements of transduction with bacteriophage PBS1 are more stringent than those of transformation. Heterologous transduction between these strains occurs at a low frequency or not at all, whereas heterologous transformation occurs readily. The heterologous transduction which does occur in this system displays the loose genetic linkage characteristic of transformation and is sensitive to a rec † † Abbreviations used: rec, recombination deficient; ery, erythromycin; str, streptomycin; mic, micrococcin; leu, leucine; met, methionine; pur, adenine or guanine; arg, arginine; phe, phenylalanine; ura, uracil; trp, tryptophan; nia, niacin; ser, serine; aro, aromatic amino acids; his, histidine; tyr, tyrosine; thr, threonine; rib, riboflavin; ilv, isoleucine & valine; ile, isoleucine; amm, inability to assimilate NH 4 +; cys, cysteine; lys, lysine; thy, thymine. mutation which depresses transformation but hardly affects homologous transduction. It is suggested that two pathways for handling donor genetic material exist in B. subtilis. Pathway I predominates in transformation and is relatively permissive to foreign DNA, while pathway II predominates in transduction and is relatively non-permissive. The basis of the foreigness recognized in this system is most likely lack of DNA base sequence homology rather than DNA modification. Limited base-sequence inhomology is demonstrated between W23 and 168 DNA, but no evidence could be obtained for the existence of a restriction-modification system. A hypothesis is presented in which the difference in size between transforming and transducing DNA fragments is the most important factor determining the specificity difference between transformation and transduction in B. subtilis. This hypothesis is supported by heterologous transduction experiments using bacteriophage SP10, the DNA of which is smaller than that of PBS1. The level of heterologous transduction obtained with SP10 is intermediate between the level found with PBS1 and that obtained using heterologous transformation.