A Tier 1 network is an Internet Protocol (IP) network that can reach every other network on the Internet solely via settlement-free interconnection (also known as settlement-free peering). In other words, tier 1 networks can exchange traffic with other Tier 1 networks without paying any fees for the exchange of traffic in either direction. In contrast, some Tier 2 networks and all Tier 3 networks must pay to transmit traffic on other networks.

There is no authority that defines tiers of networks participating in the Internet. The most common and well-accepted definition of a Tier 1 network is a network that can reach every other network on the Internet without purchasing IP transit or paying for peering. By this definition, a Tier 1 network must be a transit-free network (purchases no transit) that peers for no charge with every other Tier 1 network and can reach all major networks on the Internet. Not all transit-free networks are Tier 1 networks, as it is possible to become transit-free by paying for peering, and it is also possible to be transit-free without being able to reach all major networks on the Internet.

The most widely quoted source for identifying Tier 1 networks is published by Renesys Corporation, but the base information to prove the claim is publicly accessible from many locations, such as the RIPE RIS database, the Oregon Route Views servers, Packet Clearing House, and others.

It can be difficult to determine whether a network is paying for peering or transit, as these business agreements are rarely public information, or are covered under a non-disclosure agreement. The Internet peering community is roughly the set of peering coordinators present at the Internet exchange points on more than one continent. The subset representing Tier 1 networks is collectively understood in a loose sense, but not published as such.

Common definitions of Tier 2 and Tier 3 networks:

Since approximately 2010, this hierarchical organization of Internet relationships has evolved. Large content providers with private networks and CDNs, like Google, Netflix, and Meta, have greatly reduced the role of Tier 1 ISPs and flattened the internet topology since the content providers interconnect directly with most other ISPs, bypassing Tier 1 transit providers.

The original Internet backbone was the ARPANET when it provided the routing between most participating networks. The development of the British JANET (1984) and U.S. NSFNET (1985) infrastructure programs to serve their nations' higher education communities, regardless of discipline, resulted in the NSFNet backbone by 1989. The Internet could be defined as the collection of all networks connected and able to interchange Internet Protocol datagrams with this backbone. Such was the weight of the NSFNET program and its funding ($200 million from 1986 to 1995)—and the quality of the protocols themselves—that by 1990, when the ARPANET itself was finally decommissioned, TCP/IP had supplanted or marginalized most other wide-area computer network protocols worldwide.

When the Internet was opened to the commercial markets, multiple for-profit Internet backbone and access providers emerged. The network routing architecture then became decentralized and this meant a need for exterior routing protocols: in particular, the Border Gateway Protocol emerged. New Tier 1 ISPs and their peering agreements supplanted the government-sponsored NSFNet, that program being officially terminated on April 30, 1995. The NSFnet-supplied regional networks then sought to buy national-scale Internet connectivity from these now-numerous private long-haul networks.