As water is heated and transitions from a liquid to a gas (steam), the correct response is:
The particles gain both potential and kinetic energy.
When water is heated, its temperature increases, which raises the kinetic energy of the molecules (as they move faster). Additionally, as water boils and the molecules transition into steam, they gain potential energy due to the increased distance between them in the gaseous state compared to the liquid state. Therefore, both forms of energy increase during this process.