—In this paper, BFLY–a practical localized network coding protocol for wireless mesh networks–is proposed. To supplement forwarding packets in classical networks, intermediate wireless nodes code packets from different sources, so that each transmission’s information content is increased. Prior work allowed intermediate nodes to code (i.e, XOR) packets such that the recipient of the coded message must decode the message before forwarding. BFLY, however, allows intermediate recipients to, in addition to XOR-ing, forward coded packets; and thus further exploits network coding opportunities in multihop wireless networks. BFLY utilizes knowledge of local topologies and source route information in packet headers. We have developed network coding modules in ns-2 that facilitate simulations with large networks. Simulation studies show that BFLY can increase