Generally speaking, L4 load balancers use information defined at the Transport layer (layer 4) of the OSI model. In the context of the internet, this means that L4 load balancers should use information from Transmission Control Protocol (TCP) data packets. However, as it turns out, L4 load balancers also use information from Internet Protocol (IP) packets, which is a layer 3 - the network layer. Therefore, the name "Layer 4" should be considered a misnomer.

Specifically, an L4 load balancer routes requests based on the source/destination IP addresses and ports, with zero regards to the contents of the packets.

Usually, an L4 load balancer comes in the form of a dedicated hardware device running proprietary chips and/or software.