How Network Address Translation Works

What Does NAT Do?

NAT is like the receptionist in a large office. Let's say you have left instructions with the receptionist not to forward any calls to you unless you request it. Later on, you call a potential client and leave a message for that client to call you back. You tell the receptionist that you are expecting a call from this client and to put her through.

The client calls the main number to your office, which is the only number the client knows. When the client tells the receptionist that she is looking for you, the receptionist checks a lookup table that matches your name with your extension. The receptionist knows that you requested this call, and therefore forwards the caller to your extension.

Developed by Cisco, Network Address Translation is used by a device (firewall, router or computer that sits between an internal network and the rest of the world. NAT has many forms and can work in several ways:

In static NAT, the computer with the IP address of will always translate to
  • Static NAT - Mapping an unregistered IP address to a registered IP address on a one-to-one basis. Particularly useful when a device needs to be accessible from outside the network.
In dynamic NAT, the computer with the IP address will translate to the first available address in the range from to
  • Dynamic NAT - Maps an unregistered IP address to a registered IP address from a group of registered IP addresses.
  • Overloading - A form of dynamic NAT that maps multiple unregistered IP addresses to a single registered IP address by using different ports. This is known also as PAT (Port Address Translation), single address NAT or port-level multiplexed NAT.
In overloading, each computer on the private network is translated to the same IP address (, but with a different port number assignment.
  • Overlapping - When the IP addresses used on your internal network are registered IP addresses in use on another network, the router must maintain a lookup table of these addresses so that it can intercept them and replace them with registered unique IP addresses. It is important to note that the NAT router must translate the "internal" addresses to registered unique addresses as well as translate the "external" registered addresses to addresses that are unique to the private network. This can be done either through static NAT or by using DNS and implementing dynamic NAT.
The internal IP range (237.16.32.xx) is also a registered range used by another network. Therefore, the router is translating the addresses to avoid a potential conflict with another network. It will also translate the registered global IP addresses back to the unregistered local IP addresses when information is sent to the internal network.

The internal network is usually a LAN (Local Area Network), commonly referred to as the stub domain. A stub domain is a LAN that uses IP addresses internally. Most of the network traffic in a stub domain is local, so it doesn't travel outside the internal network. A stub domain can include both registered and unregistered IP addresses. Of course, any computers that use unregistered IP addresses must use Network Address Translation to communicate with the rest of the world.

In the next section we'll look at the different ways NAT can be configured.