The defining characteristics of LANs, in contrast to wide area networks (WANs), include their usually higher data-transfer rates, smaller geographic area, and lack of a need for leased telecommunication lines.

Smaller LANs generally consist of one or more switches linked to each other, often at least one is connected to a router, cable modem, or ADSL modem for Internet access. Larger LANs are characterized by their use of redundant links with switches using the spanning tree protocol to prevent loops, their ability to manage differing traffic types via quality of service (QoS), and to segregate traffic with VLANs. Larger LANs also contain a wide variety of network devices such as switches, firewalls, routers, load balancers, and sensors.

LANs may have connections with other LANs via leased lines, leased services, or by tunneling across the Internet using virtual private network technologies. Depending on how the connections are established and secured in a LAN, and the distance involved, a LAN may also be classified as metropolitan area network (MAN) or wide area networks (WAN).