When a DHCP server fails, APIPA allocates IP addresses in the private range 169.254.0.1 to 169.254.255.254. Clients verify their address is unique on the network using ARP. When the DHCP server is again able to service requests, clients update their addresses automatically.
In APIPA, all devices use the default network mask 255.255.0.0 and all reside on the same subnet.
APIPA is enabled on all DHCP clients in Windows unless the computer's Registry is modified to disable it. APIPA can be enabled on individual network adapters.