The ability of students to understand the relationship between genotype and phenotype, and the mechanisms by which genotypes and phenotypes can change is essential for students studying genetics. To this end, we have developed a four-week laboratory called Blue Genes, which is designed to help novice students discriminate between two mechanisms by which the genetic material can be altered: genetic transformation and gene mutation. In the first week of the laboratory, students incubate a plasmid DNA with calcium chloride-treated "Escherichia coli" JM109 cells and observe a phenotype change from ampicillin sensitive to ampicillin resistant and from white color to blue color on plates containing 5-bromo-4-chloro-3-indolyl-ß-D-galactopyranoside (X-gal) and isopropyl ß-D-thiogalactopyranoside (IPTG). Over the course of the next three weeks, students use a battery of approaches including plasmid DNA isolation experiments, restriction maps, and PCR to differentiate between mutation and transformation. The students ultimately come to the conclusion that the changes in phenotypes are due to genetic transformation and not mutation based on the evidence generated over the four-week period. Pre-laboratory tests and post-laboratory tests indicate that this set of exercises is successful in helping students differentiate between transformation and mutation. The laboratory is designed for underclassmen and is a good prerequisite for an apprentice-based research opportunity, although it is not designed as a class based research experience. Potential modifications and future directions of the laboratory based upon student experiences and assessment are presented.