Network Layer – Functions and Protocols

The main function of the network layer is to deliver packets from source to destination across multiple networks. It also specifies the packet structure and its processing used to carry the data from one host to another host. It routes the packet through different channels to the other end and acts as a network controller.

The Network Layer also controls the operation of the subnet. If two computers are connected on the same link, then there is no need for this layer. It also provides addressing, encapsulation and de-encapsulation services to permit end devices to exchange data across the network. Following are the main function, services, and protocols of the network layer.

Addressing end devices

A source or destination device in a networked system. For example, Computers, laptops, file servers, web servers, Network printers, VoIP phones, Security cameras and Mobile handheld devices. the mention end device address configuration is important. Without a unique IP address, there is no concept of data transmission across the network. Addressing End device is necessary for identification of the devices on the network.


Another important service of the network layer is to encapsulate the protocol data unit (PDU) from the transport layer into an IP packet. The encapsulation method adds IP header information, such as the IP address of the source and destination hosts. The header is used to carry the packet to the appropriate host. The IP header remains in the packet until it arrives at the destination host. The figure below illustrates how the transport layer protocol data unit (PDU) and how encapsulated by the network layer protocol data unit (PDU) to create an IP packet.

Network Layer Encapsulation

The process of encapsulating data, layer by layer enables the services at the different layers to grow and scale without disturbing the other layers. This means the transport layer segments easily packaged by IPv4 or IPv6. Routers can apply these different network layer protocols to operate at the same time as over a network. The routing depends on only the contents of the network layer packet header. In all cases, the data portion of the packet; that is, the encapsulated transport layer protocol data unit (PDU) remains unchanged during the network layer processes.


When the packet received at the network layer (Layer 3) of the destination host; the host checks the IP header of the packet. If the destination IP address and the IP address of the header matches. Then the IP header removed from the packet. Removing of IP Header process called De-encapsulation. After the packet is de-encapsulated by the network layer, the resulting Layer 4 protocol data unit (PDU) passes upwards to layer 4 or the transport layer.


The network layer provides routing to direct packets to a destination host on another network. Router made it possible that the packet of one network travel to another network. The job of the router is to direct the packet to its best path toward the destination host. A packet may cross many intermediary devices before reaching the destination host. Each router crossing a packet to reach the destination host known as a hop.

Network Layer Protocols

There are several network layer protocols which are listed below. However, here we will discuss the first two protocols in the coming article which are commonly known as the IP address of the device or computer:

  • IPv4 also Internet Protocol version 4
  • IPv6 also know as Internet Protocol version 6
  • DDP, Datagram Delivery Protocol
  • DVMRP, Distance Vector Multicast Routing Protocol
  • ICMP, Internet Control Message Protocol
  • IGMP, Internet Group Management Protocol
  • IPsec, Internet Protocol Security
  • IPX, Internetwork Packet Exchange
  • PIM-DM, Protocol Independent Multicast Dense Mode
  • PIM-SM, Protocol Independent Multicast-Sparse Mode
  • RIP, also Routing Information Protocol
  • RSMLT Routed-SMLT