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In the early stages of development of the Internet Protocol, network administrators interpreted an IP address in two parts: network number portion and host number portion. The highest order octet (most significant eight bits) in an address was designated as the network number and the remaining bits were called the rest field or host identifier and were used for host numbering within a network.

This early method soon proved inadequate as additional networks developed that were independent of the existing networks already designated by a network number. In 1981, the Internet addressing specification was revised with the introduction of classful network architecture.

Classful network design allowed for a larger number of individual network assignments and fine-grained subnetwork design. The first three bits of the most significant octet of an IP address were defined as the class of the address. Three classes (A, B, and C) were defined for universal unicast addressing. Depending on the class derived, the network identification was based on octet boundary segments of the entire address. Each class used successively additional octets in the network identifier, thus reducing the possible number of hosts in the higher order classes (B and C). The following table gives an overview of this now obsolete system.