In a NAT configuration, virtual machines running on the network with the NAT device can send DHCP requests to dynamically obtain their IP addresses.

In the default configuration, the virtual DHCP server dynamically allocates IP addresses in the range of net.128 through net.254, where net is the network number assigned to the NAT network. Workstation always uses a Class C address for NAT networks. IP addresses net.3 through net.127 can be used for static IP addresses. IP address net.1 is reserved for the host virtual network adapter and net.2 is reserved for the NAT device.

In addition to the IP address, the virtual DHCP server on the NAT network sends out configuration information that enables the virtual machine to operate. This information includes the default gateway and the DNS server. In the DHCP response, the NAT device instructs the virtual machine to use the IP address net.2 as the default gateway and DNS server. This routing causes all IP packets destined for the external network and DNS requests to be forwarded to the NAT device.