Subnetting is the strategy used to partition a single physical network into more than one smaller logical sub-networks (subnets). An IP address includes a network segment and a host segment. Subnets are designed by accepting bits from the IP address's host part and using these bits to assign a number of smaller sub-networks inside the original network. Subnetting allows an organization to add sub-networks without the need to acquire a new network number via the Internet service provider (ISP). Subnetting helps to reduce the network traffic and conceals network complexity. Subnetting is essential when a single network number has to be allocated over numerous segments of a local area network (LAN).

Subnets were initially designed for solving the shortage of IP addresses over the Internet.