These two terms are sometimes loosely used interchangeably; in particular, "argument" is sometimes used in place of "parameter". Nevertheless, there is a difference. Properly, parameters appear in procedure definitions; arguments appear in procedure calls.

A parameter is an intrinsic property of the procedure, included in its definition. For example, in many languages, a minimal procedure to add two supplied integers together and calculate the sum total would need two parameters, one for each expected integer. In general, a procedure may be defined with any number of parameters, or no parameters at all. If a procedure has parameters, the part of its definition that specifies the parameters is called its parameter list.

By contrast, the arguments are the values actually supplied to the procedure when it is called. Unlike the parameters, which form an unchanging part of the procedure‘s definition, the arguments can, and often do, vary from call to call. Each time a procedure is called, the part of the procedure call that specifies the arguments is called the argument list.

Although parameters are also commonly referred to as arguments, arguments are more properly thought of as the actual values or references assigned to the parameter variables when the subroutine is called at run-time. When discussing code that is calling into a subroutine, any values or references passed into the subroutine are the arguments, and the place in the code where these values or references are given is the parameter list. When discussing the code inside the subroutine definition, the variables in the subroutine‘s parameter list are the parameters, while the values of the parameters at runtime are the arguments.

Many programmers use parameter and argument interchangeably, depending on context to distinguish the meaning. The term formal parameter refers to the variable as found in the function definition (parameter), while actual parameter refers to the actual value passed (argument).