On a local area network, token passing is a channel access method where a packet called a token is passed between nodes to authorize that node to communicate.^[1][2][3] In contrast to polling access methods, there is no pre-defined "master" node.^[4] The most well-known examples are IBM Token Ring and ARCNET, but there were a range of others, including FDDI (Fiber Distributed Data Interface), which was popular in the early to mid 1990s.

Token passing schemes degrade deterministically under load, which is a key reason why they were popular for industrial control LANs such as MAP, (Manufacturing Automation Protocol).^[5] The advantage over contention based channel access (such as the CSMA/CD of early Ethernet), is that collisions are eliminated, and that the channel bandwidth can be fully utilized without idle time when demand is heavy.^[6] The disadvantage is that even when demand is light, a station wishing to transmit must wait for the token, increasing latency.

Some types of token passing schemes do not need to explicitly send a token between systems because the process of "passing the token" is implicit. An example is the channel access method used during "Contention Free Time Slots" in the ITU-T G.hn standard for high-speed local area networking using existing home wires (power lines, phone lines and coaxial cable).^{[citation needed]}