gbj and dbwiz's solutions are more elegant, but if you want it inside an existing script, you could use something like this:

#!/usr/bin/perl

use warnings;
use strict;

my $file = "txtfile";

# Read the file into $old_text:
#
open my $old_fh, "<$file";
my $old_text;
do { local $/; $old_text = <$old_fh> };
close $old_fh;

# Do the substitution
#
( my $new_text = $old_text ) =~ s/\bfrog\b/toad/g;

# Write the new "toad" data out, overwriting the old file
#
open my $new_fh, ">$file";
print $new_fh $new_text;
close $new_fh;
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