Transformation was first demonstrated in 1928 by British bacteriologist Frederick Griffith. Griffith discovered that a strain of Streptococcus pneumoniae could be made virulent after being exposed to heat-killed virulent strains. Griffith hypothesized that some "transforming principle" from the heat-killed strain was responsible for making the harmless strain virulent. In 1944 this "transforming principle" was identified as being genetic by Oswald Avery, Colin MacLeod, and Maclyn McCarty. They isolated DNA from a virulent strain of S. pneumoniae and using just this DNA was able to make a harmless strain virulent. They called this uptake and incorporation of DNA by bacteria "transformation" (See Avery-MacLeod-McCarty experiment). The results of Avery et al.'s experiments were at first skeptically received by the scientific community and it was not until the development ofgenetic markers and the discovery of other methods of genetic transfer (conjugation in 1947 and transduction in 1953) by Joshua Lederberg that Avery's experiments were accepted.

It was originally thought that Escherichia coli, a commonly used laboratory organism, was refractory to transformation. However, in 1970, Morton Mandel and Akiko Higa showed that E. coli may be induced to take up DNA from bacteriophage λ without the use of helper phage after treatment with calcium chloride solution. Two years later in 1972, Stanley Cohen, Annie Chang and Leslie Hsu showed that CaCl2 treatment is also effective for transformation of plasmid DNA. The method of transformation by Mandel and Higa was later improved upon by Douglas Hanahan. The discovery of artificially induced competence in E. coli created an efficient and convenient procedure for transforming bacteria which allows for simpler molecular cloning methods in biotechnology and research, and it is now a routinely used laboratory procedure.

Transformation using electroporation was developed in the late 1980s, increasing the efficiency of in-vitro transformation and increasing the number of bacterial strains that could be transformed. Transformation of animal and plant cells was also investigated with the first transgenic mouse being created by injecting a gene for a rat growth hormone into a mouse embryo in 1982. In 1907 a bacterium that caused plant tumors, Agrobacterium tumefaciens, was discovered and in the early 1970s the tumor-inducing agent was found to be a DNA plasmid called the Ti plasmid. By removing the genes in the plasmid that caused the tumor and adding in novel genes, researchers were able to infect plants with A. tumefaciens and let the bacteria insert their chosen DNA into the genomes of the plants. Not all plant cells are susceptible to infection by A. tumefaciens, so other methods were developed, including electroporation and micro-injection. Particle bombardment was made possible with the invention of the Biolistic Particle Delivery System (gene gun) byJohn Sanford in the 1980s.