Apple Training Series: Mac OS X Support Essentials v10.6: A Guide to Supporting and Troubleshooting Mac OS X v10.6 Snow Leopard

DHCP provides a protocol to dynamically allocate IP addresses to computers on a local network.

System administrator assigns a range of IP addresses to DHCP, and LAN clients are granted them upon request. (Client computers receive "leases" that allow them to use the IP address for a fixed period of time, or for the period that they are active on the network.)

DHCP can be configured in Network preferences.