What is DHCP?

Dynamic Host Configuration Protocol (DHCP) is a network protocol that enables a server to automatically assign an IP address to a computer from a defined range of numbers (i.e., a scope) configured for a given network.
DHCP assigns an IP address when a system is started, for example:

1. A user turns on a computer with a DHCP client.
   
   
2. The client computer sends a broadcast request (called a DISCOVER or DHCPDISCOVER), looking for a DHCP server to answer.
   
   
3. The router directs the DISCOVER packet to the correct DHCP server.
   
   
4. The server receives the DISCOVER packet. Based on availability and usage policies set on the server, the server determines an appropriate address (if any) to give to the client. The server then temporarily reserves that address for the client and sends back to the client an OFFER (or DHCPOFFER) packet, with that address information. The server also configures the client's DNS servers, WINS servers, NTP servers, and sometimes other services as well.
   
   
5. The client sends a REQUEST (or DHCPREQUEST) packet, letting the server know that it intends to use the address.
   
   
6. The server sends an ACK (or DHCPACK) packet, confirming that the client has a been given a lease on the address for a server-specified period of time.

When a computer uses a static IP address, it means that the computer is manually configured to use a specific IP address. One problem with static assignment, which can result from user error or inattention to detail, occurs when two computers are configured with the same IP address. This creates a conflict that results in loss of service. Using DHCP to dynamically assign IP addresses minimizes these conflicts.
For a technical review of DHCP standards, see RFCs 2131 and 2132.
Note: At Indiana University, UITS prohibits individuals and departments from setting up local DHCP servers on the IU network. Almost all wireless access points, many wired Ethernet routers, and computers running Internet Connection Sharing have built-in DHCP servers. While this makes configuration of a small network easier, it can cause problems when the DHCP servers are used in larger networks. Client computers configured to use DHCP for IP assignment do not need statically assigned IP addresses. In addition, they generally do not need to have addresses configured for DNS servers or WINS servers, as these are also set by the DHCP server. For more, see What are the DHCP operational policies at IU?