A local area network (LAN) is a group of computers that are connected together in a localized area to communicate with one another and share resources such as printers. Data is sent in the form of packets and to regulate the transmission of the packets, different technologies can be used. The most widely used LAN technology is the Ethernet and it is specified in a standard called IEEE 802.3. (Other types of LAN networking technologies include token ring and FDDI.)

Ethernet uses a star topology in which the individual nodes (devices) are networked with one another via active networking equipment such as switches. The number of networked devices in a LAN can range from two to several thousand.

The physical transmission medium for a wired LAN involves cables, mainly twisted pair or fiber optics. A twisted pair cable consists of eight wires, forming four pairs of twisted copper wires and is used with RJ-45 plugs and sockets. The maximum cable length of a twisted pair is 100 m (328 ft.) while for fiber optic cable, the maximum length ranges from 10 km to 70 km, depending on the type of fiber. Depending on the type of twisted pair or fiber optic cables used, data rates today can range from 100 Mbit/s to 10,000 Mbit/s.

A rule of thumb is to always build a network with greater capacity than is currently required. To future-proof a network, it is a good idea to design a network such that only 30% of its capacity is used. Since more and more applications are running over networks today, higher and higher network performance is required. While network switches (discussed below) are easy to upgrade after a few years, cabling is normally much more difficult to replace.