AppleTalk is a layer-3 network protocol similar to IP. AppleTalk operates over Ethernet and "LocalTalk", a layer-2 technology that used proprietary serial cables and dedicated telephone wiring as its physical media.
AppleTalk is a robust routable network protocol that was developed by Apple Computer in the mid-1980s to provide networking capabilities to its Macintosh family of computers. The initial form of this protocol, now known as AppleTalk Phase-1, was limited to one network segment and 127 AppleTalk devices. Although AppleTalk Phase-1 was great at supporting small workgroup networks, Apple soon realized that it would need to make changes if it wanted to build larger networks.
In 1988, Apple introduced the current version AppleTalk that is used in all Macintoshes today, AppleTalk Phase-2. AppleTalk Phase-2 extended AppleTalk to include the concept of sub-networks as well as expanding the number of network devices that can be present on a single network segment.