The DHCP client in Windows 2000 and Windows XP has the ability, in the absence of a DHCP server, to configure an IP address and subnet mask automatically when the client starts on a small private network. This feature is called Automatic Private IP Addressing (APIPA). APIPA assigns a unique address from the range 169.254.0.1 through 169.254.255.254 with the subnet mask of 255.255.0.0.
The DHCP client service uses a two-step process to configure the client with an IP address and other configuration information. Upon installation, the client attempts to locate a DHCP server and obtain a configuration from it. Most TCP/IP networks use DHCP servers that are configured to dispense information to clients on the network. For Windows–based operating systems, if the first attempt to locate a DHCP server fails, the DHCP client configures itself with a selected IP address and APIPA address.
If the DHCP client has previously obtained a lease from the DHCP server and the lease has not expired, the client tries to renew any unexpired lease with the DHCP server. If the client fails to locate any DHCP server, it attempts to ping the default gateway listed in the lease. If this action is successful, the client assumes it has not moved to a different network and uses that lease. The client then seeks to automatically renew the lease when half of the lease time has expired.
If the attempt to ping the default gateway fails, the client assumes that it moved to a network that has no DHCP services available, and it configures itself with an APIPA address. It then automatically keeps trying to locate a DHCP server every five minutes.
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