The client broadcasts messages on the physical subnet to discover available DHCP servers. Network administrators can configure a local router to forward DHCP packets to a DHCP server from a different subnet. This client-implementation creates a User Datagram Protocol (UDP) packet with the broadcast destination of 255.255.255.255 or the specific subnet broadcast address.
A DHCP client can also request its last-known IP address (in the example below, 192.168.1.100). If the client remains connected to a network for which this IP is valid, the server might grant the request. Otherwise, it depends whether the server is set up as authoritative or not. An authoritative server will deny the request, making the client ask for a new IP address immediately. A non-authoritative server simply ignores the request, leading to an implementation-dependent timeout for the client to give up on the request and ask for a new IP address.
When a DHCP server receives an IP lease request from a client, it reserves an IP address for the client and extends an IP lease offer by sending a DHCPOFFER message to the client. This message contains the client's MAC address, the IP address that the server is offering, the subnet mask, the lease duration, and the IP address of the DHCP server making the offer.
The server determines the configuration based on the client's hardware address as specified in the CHADDR (Client Hardware Address) field. Here the server, 192.168.1.1, specifies the IP address in the YIADDR (Your IP Address) field.
A client can receive DHCP offers from multiple servers, but it will accept only one DHCP offer and broadcast a DHCP request message. Based on the Transaction ID field in the request, servers are informed whose offer the client has accepted. When other DHCP servers receive this message, they withdraw any offers that they might have made to the client and return the offered address to the pool of available addresses. The DHCP request message is broadcast, instead of being unicast to a particular DHCP server, because the DHCP client has still not received an IP address. Also, this way one message can let all other DHCP servers know that another server will be supplying the IP address without missing any of the servers with a series of unicast messages.
When the DHCP server receives the DHCPREQUEST message from the client, the configuration process enters its final phase. The acknowledgement phase involves sending a DHCPACK packet to the client. This packet includes the lease duration and any other configuration information that the client might have requested. At this point, the IP configuration process is completed.
The protocol expects the DHCP client to configure its network interface with the negotiated parameters.