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How DHCP Works in an Ethernet/IP LAN environment and assumes the client is obtaining a fresh lease without foreknowledge of the DHCP server's IP address. Note that this is highly simplified.

1. A client boots and initializes its network hardware
2. The client sends out a DHCPDISCOVER message formatted as follows:
   1. The source MAC is the client's MAC
   2. The destination MAC is all 1's indicating a hardware-layer broadcast (FFFFFF-FFFFFF)
   3. The message type is set to DHCPDISCOVER
3. The server hears the DHCPDISCOVER request and responds
   1. The source MAC is the server's MAC
   2. The destination MAC is the client's MAC
   3. The message type is DHCPOFFER containing:
      1. Server-provided IP address from pool of free addresses (the server should but is not required to check for address conflicts before offering the IP address).
      2. List of DHCP configuration parameters
   4. Client responds with DHCPREQUEST message and does one or more of the following:
      1. requests values for the server-offered parameters from a single server (rejecting all offers from other servers)
      2. confirm the correctness of the previously allocated IP address (after the client had rebooted or lost connection to the network)
      3. requests extension of the lease on the specific address already supplied.
   5. The server responds with
      1. a DHCPACKnowledge to confirm the server-offered options and IP previously confirmed by the client -
         - or-
      2. a DHCPNOACKnowledge to reject the server-offered options.
         - or -
      3. a DHCPDECLINE message to indicate to the server the address is in use.
   6. The client retains the information throughout the period of its lease.
   7. The client sends a DHCPRELEASE message to release its IP address at the DHCP server when it is leaving the network.