This article is from the Token Ring FAQ, by James Messer James@NetworkUptime.com with numerous contributions by others.
A token ring network uses a special frame called a token that
rotates around the ring when no stations are actively sending
information. When a station wants to transmit on the ring, it must
capture this token frame. The owner of the token is the only station
that can transmit on the ring, unlike the Ethernet topology where
any station can transmit at any time. Once a station captures the
token, it changes the token into a frame format so data can be sent.
As the data traverses the ring, it passes through each station on
the way to the destination station. Each station receives the frame
and regenerates and repeats the frame onto the ring. As each station
repeats the frame, it performs error checks on the information
within the frame. If an error is found, a special bit in the frame
called the Error Detection bit is set so other stations will not
report the same error.
Once the data arrives at the destination station, the frame is
copied to the destination's token ring card buffer memory. The
destination station repeats the frame onto the ring, changing two
series of bits on the frame. These bits, called the Address
Recognized Indicator (ARI) and the Frame Copied Indicator (FCI),
determines if the destination station had seen the frame and has had
ample buffer space available to copy the frame into memory. If the
frame is not copied into memory, it is the responsibility of the
sending station to retransmit the frame.
The frame continues around the ring, arriving back at the source
station who recognizes the sending address as it's own. The frame is
then stripped from the ring, and the source station sends a free