A high performance network interface receives network traffic in the form of packets. Prior to being transferred to a host computer, a packet is stored in a packet queue. A system and method are provided for randomly discarding a packet if the rate of packet transfers cannot keep pace with the rate of packet arrivals at the queue. When a packet must be dropped a selected packet may be discarded as it arrives at the queue, or a packet already in the queue may be dropped. A packet queue is apportioned into multiple regions, any of which may overlap or share a common boundary. A probability indicator is associated with a region to specify the probability of a packet being discarded when the level of traffic stored in the queue is within the region. A counter may be employed in conjunction with a probability indicator to identify individual packets. Probability indicators may differ from region to region so that the probability of discarding a packet fluctuates as the level of traffic stored in the queue changes. In addition to selecting packets to be dropped on a random basis, information gleaned from a packet may be applied to prevent certain types of packets from being dropped. The information derived from a packet may be obtained during a procedure in which one or more of the packet's headers are parsed. By parsing a packet, it may be determined whether the packet conforms to a pre-selected protocol.