The network layer builds on the connection made by the data link layer. It adds the unit of information called packets. The network layer handles routing (the process of delivering packets through an internetwork) and congestion control. It's the highest layer of the OSI model that understands the network's topology, that is, the physical configuring of the machines, type and length of cabling, and so forth.
Examples of network layer protocols are IPX, IP, and AppleTalk's Datagram Delivery Protocol (DDP).