A router is another network infrastructure device that directs packets through the network based on information from Network Layer (Layer 3) of OSI model. A router uses a combination of hardware and software to "route" data from its source to its destination. A router can be configured to route data packets from different network protocols, like TCP/IP (industry standard), IPX/SPX, and AppleTalk.
Routers segment large networks into logical segments called subnets. The division of the network is based on the Layer 3 addressing system, like IP addresses. If the Network Layer (Layer 3) Data packet (IP Datagram) is addressed to another device on the local subnet, the packet does not cross the router and create a traffic congestion problem in another network. If data is addressed to a computer outside the subnet, the router forwards the data to the addressed network. Thus routing of network data helps conserve network bandwidth. The following picture shows a Cisco 2800 Series Router.