A particular status of the English language as the language of international communication and connections between the nearly related English and German languages resulted in the emergence of many interlingual borrowings in the Modern English and German language vocabularies. The paper aims to consider the functioning of borrowings (loanwords) in the English and German languages. To reach the aim of the research and to carry out the tasks assigned, the following methods were used: a descriptive method, the method of correlation, componential analysis and, comparative semantic analysis. The paper focuses on linguistic and extralinguistic factors of the German and English interaction. Special attention is paid to clarifying the notion of borrowing in modern linguistic science. The word-formative calques and half-calques (hybrids), which differ from ordinary lexical borrowings by using partially borrowed lexical material, are identified in addition to direct lexical borrowings in the language subsystem under study. The paper demonstrates the significant influence of English borrowings on the structural-semantic qualities of German words, on various semantic changes, as well as on the participation of loanwords in the lexico-semantic variation: synonymy, polysemy, homonymy, and antonymy. The results of the research can also be used in the teaching and learning of both languages, in the course of lexicology or linguistics.