The network layer is responsible for carrying packets between hosts and routing packets through routers and switches. It addresses each device with an IP address to allow global communication. Routing protocols like RIP, OSPF, and BGP are used for routing packets within and between autonomous systems. Multicast routing protocols deliver data from one source to multiple destinations, while flooding can be used for broadcast routing but wastes bandwidth. The network layer packetizes data, fragments packets if needed for transmission through different networks, and performs address resolution.