Network Address Translation, Internet standard that allows a local-area network (LAN) to use one set of IP addresses for external traffic and a second set of addresses for internal traffic . A NAT box located at the head end of a system or where the LAN meets the Internet makes all necessary IP address translations.
NAT serves three main purposes:
Provides a type of firewall by hiding internal IP addresses
Use more internal IP addresses. Since they're used internally only, there's no possibility of conflict with IP addresses used by other companies and organizations out side the internal network.