A direct quotation is when you use someone's exact words in your paper. These must be placed inside quotation marks. However, in some cases you may come across an idea you want to use, but you want to express it in your own words. This is called "paraphrasing".

You might paraphrase because you're trying to make a long passage shorter, or to take out irrelevant or confusing information. Or because you think you can say something better than the author said it, possibly by including other information. When you paraphrase, you still need to provide the citation.

A paraphrase is...

Your own rendition of essential information and ideas expressed by someone else, presented in a new form.
A legitimate way to borrow from a source (as long as you credit your source!)
A more detailed restatement than a summary, which focuses concisely on a single main idea.

Paraphrasing is a valuable skill because...

It is better than quoting information from an undistinguished passage.
It helps you control the temptation to quote too much.
The mental process required for successful paraphrasing helps you to grasp the full meaning of the original.

6 Steps to Effective Paraphrasing

Reread the original passage until you understand its full meaning.
Set the original aside, and write your paraphrase on a note card.
Jot down a few words below your paraphrase to remind you later how you envision using this material. At the top of the note card, write a key word or phrase to indicate the subject of your paraphrase.
Check your rendition with the original to make sure that your version accurately expresses all the essential information in a new form.
Use quotation marks to identify any unique term or phraseology you have borrowed exactly from the source.
Record the source (including the page) on your note card so that you can credit it easily if you decide to incorporate the material into your paper.

Source: Purdue Owl. https://owl.purdue.edu/owl/research_and_citation/using_research/quoting_paraphrasing_and_summarizing/paraphrasing.html