The most significant protocol at layer 3 (also called the network layer) is the Internet Protocol, or IP. IP is the standard for routing packets across interconnected networks--hence, the name internet. It is an encapsulating protocol similar to the way Ethernet is an encapsulating protocol. If we view the original check as a unit of data needed to be sent, we now have two envelopes required to do the transmission--the check first goes into an IP envelope, and then the entire IP envelope (known as a packet) is placed into an Ethernet frame.

The format of an IP packet is documented in RFC 791. The most significant aspect of the IP protocol is the addressing: every IP packet includes the IP source address (where the packet is coming from) and the IP destination address (where the packet is heading to).

Figure 1 shows the layout of an IP version 4 header.

 0                   1                   2                   3 
 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|Version|  IHL  |Type of Service|          Total Length         |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|         Identification        |Flags|      Fragment Offset    |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|  Time to Live |    Protocol   |         Header Checksum       |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|                       Source Address                          |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|                    Destination Address                        |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
|                    Options                    |    Padding    |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+

The fields that are of most interest in the example are the source and destination address fields. But the IP header also includes the Type of Service, which allows some control over the way this packet is treated as it is moved around the internet. The length of the packet must be included in this header, since IP packets can contain a variable amount of data.

Up to this point, we haven't dealt with anything other than a single network. Technically, two hosts could communicate with each other just fine using only MAC addresses and the Ethernet protocol. However, this never happens. Instead, the actual locating and delivery of data is facilitated by IP at layer 3 (see the topic on TCP/IP-based layered network) by using layer 2. The first step for accomplishing this is the address resolution protocol, or ARP.