There are several problems with classful addressing; the biggest resulting from not having a network class that can efficiently support a medium-sized domain. Generally, a Class C network supporting 254 hosts is too small, while a Class B network supporting 65,534 hosts is much too large. To prevent a negative impact on the Internet routing tables, a request for a network address block from medium domains is generally handled by assigning a Class B network address rather than multiple Class C network addresses, wasting several thousand potential host addresses.

Some of the problems created by two-level classful addressing can be overcome by subnetting.