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We introduce and discuss two schemes for generation and transfer of photon-photon and atom-atom entanglement. First we propose a method to achieve a large conditional phase shift of a probe field in the presence of a single-photon control field whose carrier frequency is within the photonic band gap created by spatially-periodic modulation of the electromagnetically induced transparency resonance. Then we present the concept of a reversible transfer of the quantum state of two internally-translationally entangled fragments, formed by molecular dissociation, to a photon pair. Our scheme allows, in principle, high-fidelity state transfer from the entangled dissociated fragments to light, thereby producing a highly correlated photon pair. This process can be followed by its reversal at a distant node of a quantum network resulting in the recreation of the original two-fragment entangled state. The proposed schemes may have advantageous applications in quantum teleportation, cryptography, and quantum computation.