The Layers

Think of the seven layers as the assembly line in the computer. At each layer, certain things happen to the data that prepare it for the next layer. The seven layers, which separate into two sets, are:

Application Set

Layer 7: Application - This is the layer that actually interacts with the operating system or application whenever the user chooses to transfer files, read messages or perform other network-related activities.

Layer 6: Presentation - Layer 6 takes the data provided by the Application layer and converts it into a standard format that the other layers can understand.
Layer 5: Session - Layer 5 establishes, maintains and ends communication with the receiving device.

Transport Set

Layer 4: Transport - This layer maintains flow control of data and provides for error checking and recovery of data between the devices. Flow control means that the Transport layer looks to see if data is coming from more than one application and integrates each application's data into a single stream for the physical network.
Layer 3: Network - The way that the data will be sent to the recipient device is determined in this layer. Logical protocols, routing and addressing are handled here.
Layer 2: Data - In this layer, the appropriate physical protocol is assigned to the data. Also, the type of network and the packet sequencing is defined.
Layer 1: Physical - This is the level of the actual hardware. It defines the physical characteristics of the network such as connections, voltage levels and timing.

The OSI Reference Model is really just a guideline. Actual protocol stacks often combine one or more of the OSI layers into a single layer
.