DHCP (Dynamic Host Configuration Protocol) is a server service that dynamically assigns, or leases, IP addresses and related IP information to network clients. On a TCP/IP network, each network client must have a unique IP address and an appropriate subnet mask.

DHCP handles each client gets a unique IP address, subnet mask, and other IP information such as default gateways and the IP addresses of WINS (Windows Internet Name Service) and DNS (Domain Name System) servers. DHCP makes certain that no clients have duplicate addresses, and this entire process is invisible to network administrators and network users.

How does DHCP work?

DHCP works by leasing IP addresses and IP information to network clients for a period of time. For the lease to happen, the following negotiation process occurs:

1. During the boot process, a client computer that is configured as a DHCP client sends out a broadcast packet called DHCPDISCOVER. This Discover packet contains the client's computer name and Media Access Control (MAC) address so the DHCP servers can respond to it. Basically, the Discover packet says, "I'm looking for a DHCP server who can lease an IP address."

2. DHCP servers on the network respond to the broadcast with a DHCPOFFER. In essence, the DHCPOFFER says, "I am a DHCP server and I have a lease for you." If several DHCP servers respond to the request, the client accepts the first offer that it receives.

3. The client responds via a broadcast message called a DHCPREQUEST. This message basically says, "I accept your lease offer and would like an IP address." If other DHCP servers made offers, they also see their lease offers were not accepted by the broadcast message, so they rescind their offers. (They must not like getting snubbed by a client computer.)

4. The DHCP server whose offer was accepted responds with a DHCPACK message, which acknowledges the lease acceptance and contains the client's IP address lease as well as other IP addressing information that you configure the server to provide. The client is now a TCP/IP client and can participate on the network.

Keep in mind that a lease is for a period of time. Typically, a client can keep its IP address for several days (or whatever you configure). When half the lease time expires, the client attempts to renew its lease for the IP address. After a client obtains the lease for an IP address, it attempts to keep the lease by renewing it over and over. If unsuccessful, the client simply must get a new IP address lease.

Important DHCP Terms

DHCP Term	What It Means
Scope	A full range of IP addresses that can be leased from a particular DHCP server.
Superscope	A grouping of scopes used to support logical IP subnets that exist on one physical IP subnet (called a multinet).
Multicast Scope	A scope that contains multicast IP addresses, which treat multicast clients as a group. Multicast is an extension of DHCP and uses a multicast address range of 224.0.0.0 to 239.255.255.255.
Address Pool	The IP addresses in a scope that are available for lease.
Exclusion Range	A group of IP address in the scope that are excluded from leasing. Excluded addresses are normally used to give hardware devices, such as routers, a static IP address.
Reservation	A means for assigning a permanent IP address to a particular client, server, or hardware device. Reservations are typically made for servers or hardware devices that need a static IP address.
Lease	The amount of time that a client may use an IP address before the client must re-lease the IP address or request another one.