Developed in the 1970s, Ethernet has become one of the most widely used Local Area Networks (LANs). Ethernet's commercial success and the explosive growth of related web technologies have made Ethernet an attractive option for industrial users.

The simplest LAN is composed of three basic elements: devices (computers and peripherals) which are commonly referred to as nodes, Network Interface Cards (NICs) for connecting nodes to the network, and the media (wires or cable) which connect the devices that make up a LAN. LANs also require networking software, which is included in operating systems like Microsoft Windows 95/98/NT/2000, Apple Mac OS and Unix variants.

Selecting appropriate media (or cable) is the essential starting point. There are four types of media: thick coaxial cable (coax) for 10BASE5 networks, thin coax for 10BASE2, unshielded twisted pair (UTP) for 10BASE-T and 100BASE-TX, and fiber-optic cable for 10BASE-FL and 100BASE-FX networks.

Thick coax was the original cabling scheme for Ethernet networks. It was soon replaced by thin coax, which was less expensive and easier to work with. The most popular wiring schemes (10BASE-T, 100BASE-TX) use UTP cable. This cable is similar to telephone cable, and is available in a variety of grades, with each higher grade offering better performance. Level 5 (or CAT5) is commonly used for 10BASE-T and 100BASE-TX networks. In installations where environmental hazards (lightning), long cable runs, and electromagnetic interference are issues, fiber-optic cable can be used.

The transmission speed of Ethernet (10BASE2, 10BASE5, 10BASE-T, 10BASE-FL) is 10 Megabits per second (Mbps). Fast Ethernet (100 BASE-TX, 100BASE-FX) raises the speed to 100Mbps. Emerging Gigabit Ethernet networks operate at 1Gbps (1,000 Mbps).

The physical arrangement of the network is referred to as the network topology. Ethernet support two basic configurations: bus and star.

A bus topology consists of nodes connected in series. This configuration often makes changes to the network difficult, and a break in the cable will often cause the entire segment to be inoperable. Examples of this topology include 10BASE2 and 10BASE5. 10BASE-T and 100BASE-TX use a star topology, in which UTP cables are terminated at a central location with a hub or switch. Its primary advantage topology is reliability—a break in the point-to-point cable connecting a node affects only that node. It also enables easier network expansion, since nodes can be added without disruption to the network.

Network protocols define how nodes identify one another on the network, the format of data sent between nodes, and the procedures for handling lost or damaged data. Protocols are separate from the physical network, thus allowing multiple protocols to coexist on the network. In recent years, TCP/IP has become the overwhelming favorite, since it is the foundation of the Internet, and it can be used on most operating systems.

Hubs, switches, and routers are used to join network segments. Hubs, the simplest of these devices, work by amplifying signals received on one port and by broadcasting it out the other ports. Switches expand the capabilities of hubs by switching connections between nodes, reducing the "shared network" to only two nodes. Switching is automatic, resulting in full available bandwidth between any two nodes.

Another means of increasing network efficiency is to limit traffic between network segments. Routers can logically segment networks, so that only traffic destined for a particular node can pass between network segments.