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A subnetwork, or subnet, is a logical subdivision of an IP network.^: 1, 16 The practice of dividing a network into two or more networks is called subnetting.

Computers that belong to the same subnet are addressed with an identical group of its most-significant bits of their IP addresses. This results in the logical division of an IP address into two fields: the network number or routing prefix, and the rest field or host identifier. The rest field is an identifier for a specific host or network interface.

The routing prefix may be expressed as the first address of a network, written in Classless Inter-Domain Routing (CIDR) notation, followed by a slash character (/), and ending with the bit-length of the prefix. For example, 198.51.100.0/24 is the prefix of the Internet Protocol version 4 network starting at the given address, having 24 bits allocated for the network prefix, and the remaining 8 bits reserved for host addressing. Addresses in the range 198.51.100.0 to 198.51.100.255 belong to this network, with 198.51.100.255 as the subnet broadcast address. The IPv6 address specification 2001:db8::/32 is a large address block with 2⁹⁶ addresses, having a 32-bit routing prefix.

For IPv4, a network may also be characterized by its subnet mask or netmask, which is the bitmask that, when applied by a bitwise AND operation to any IP address in the network, yields the routing prefix. Subnet masks are also expressed in dot-decimal notation like an IP address. For example, the prefix 198.51.100.0/24 would have the subnet mask 255.255.255.0.

Traffic is exchanged between subnets through routers when the routing prefixes of the source address and the destination address differ. A router serves as a logical or physical boundary between the subnets.

The benefits of subnetting an existing network vary with each deployment scenario. In the address allocation architecture of the Internet using CIDR and in large organizations, efficient allocation of address space is necessary. Subnetting may also enhance routing efficiency, or have advantages in network management when subnets are administratively controlled by different entities in a larger organization. Subnets may be arranged logically in a hierarchical architecture, partitioning an organization's network address space into a tree-like routing structure, or other structures, such as meshes.