Recent measurements of local-area and wide-area traffic have shown that network traffic exhibits variability at a wide range of scales. In this paper, we examine a mechanism that gives rise to self-similar network traffic and present some of its performance implications. The mechanism we study is the transfer of files or messages whose size is drawn from a heavy-tailed distribution. First, we show that in a "realistic" client/server network environment--i.e., one with bounded resources and coupling among traffic sources competing for resources--the degree to which file sizes are heavy-tailed can directly determine the degree of traffic self-similarity at the link level. We show that this causal relationship is robust with respect to changes in network resources (bottleneck bandwidth and buffer capacity), network topology, the influence of crosstraffic, and the distribution of interarrival times. Second, we show that properties of the transport layer play an important role in...