Difference between Call by Value and Call by Reference Functions can be invoked in two ways: Call by Value or Call by Reference. These two ways are generally differentiated by the type of values passed to them as parameters. $,$ The parameters passed to function are called actual parameters whereas the parameters received by function are called formal parameters. Call By Value: In this parameter passing method, values of actual parameters are copied to function's formal parameters and the two types of parameters are stored in different memory locations. So any changes made inside functions are not reflected in actual parameters of caller. Call by Reference: Both the actual and formal parameters refer to same locations, so any changes made inside the function are actually reflected in actual parameters of caller.