It is similar but the backing isn't carbon (you wouldn't be able to get rid of the cabon from your support). As I understand the difference now, transfer paper has a backing and when you rub over the paper it leaves an underdrawing for you. With tracing paper you have to apply some sort of backing like graphite or charcoal which will rub off on the support after you go over your tracing. Usually you use charcoal for the back of tracing paper. The charcoal is compatible with for example, oil paintings. I have yet to use either, but I like the idea of using one's own drawings to repaint something in a new way. I am self-taught. Perhaps if I had attended art school I would have already known the answer to this one. A friend of mine, who attended art school, told me that they use tracing paper to perfect a drawing before it is transferred to the support so that the final version is not marred by erasures, etc. Anyway, I hope this helps anyone else who was wondering about the difference.