Gateways work on all seven layers of OSI architecture. The main job of a gateway is to convert protocols among communications networks. A router by itself transfers, accepts and relays packets only across networks using similar protocols. A gateway on the other hand can accept a packet formatted for one protocol (e.g.AppleTalk) and convert it to a packet formatted for another protocol (e.g.TCP/IP) before forwarding it. A gateway can be implemented in hardware, software or both, but they are usually implemented by software installed within a router. A gateway must understand the protocols used by each network linked into the router. Gateways are slower than bridges, switches and (non-gateway) routers.

A gateway is a network point that acts as an entrance to another network. On the Internet, a node or stopping point can be either a gateway node or a host (end-point) node. Both the computers of Internet users and the computers that serve pages to users are host nodes, while the nodes that connect the networks in between are gateways. For example, the computers that control traffic between company networks or the computers used by internet service providers(ISPs) to connect users to the internet are gateway nodes.

In the network for an enterprise, a computer server acting as a gateway node is often also acting as a proxy server and a firewall server. A gateway is often associated with both a router, which knows where to direct a given packet of data that arrives at the gateway, and a switch, which furnishes the actual path in and out of the gateway for a given packet.

On an IP network, clients should automatically send IP packets with a destination outside a given subnet mask to a network gateway. A subnet mask defines the IP range of a network. For example, if a network has a base IP address of 192.168.0.0 and has a subnet mask of 255.255.255.0, then any data going to an IP address outside of 192.168.0.X will be sent to that network's gateway. While forwarding an IP packet to another network, the gateway might or might not perform Network Address Translation.

A gateway is an essential feature of most routers, although other devices (such as any PC or server) can function as a gateway.