The genetic structure that carries hereditary information is called DNA (deoxyribonucleic acid). DNA is composed of nucleotide sequences that encode the instructions for building an organism's proteins, which determine its traits and functions. These sequences are organized into genes, and the complete set of DNA, including all genes, is referred to as the genome. Inheritance occurs when DNA is passed from parents to offspring, allowing for the transfer of genetic information across generations, which is essential for evolution and diversity within species.