New Higgs transitions between dual N=2 string models

We describe a new kind of transition between topologically distinct N=2 type II Calabi--Yau vacua through points with enhanced non-abelian gauge symmetries together with fundamental charged matter hypermultiplets. We connect the appearance of matter to the local geometry of the singularity and discuss the relation between the instanton numbers of the Calabi--Yau manifolds taking part in the transition. In a dual heterotic string theory on K3\times T^2 the process corresponds to Higgsing a semi-classical gauge group or equivalently to a variation of the gauge bundle. In special cases the situation reduces to simple conifold transitions in the Coulomb phase of the non-abelian gauge symmetries.