TCP/IP Protocol Suite explained briefly

TCP/IP is based on a four-layer reference model. All protocols that belong to the TCP/IP protocol suite are located in the top three layers of this model.

As shown in the following diagram, each layer of the TCP/IP model corresponds to one or more layers of the seven-layer Open Systems Interconnection (OSI) reference model proposed by the International Organization for Standardization (ISO).

Diagram

The types of services performed and protocols used at each layer within the TCP/IP model are described in more detail below.

Application: Defines TCP/IP application protocols and how host programs interface with transport layer services to use the network. 

• Protocols: HTTP, Telnet, FTP, TFTP, SNMP, DNS, SMTP, other application protocols

Transport: Provides communication session management between host computers. Defines the level of service and status of the connection used when transporting data. 

• Protocols: TCP, UDP, RTP, RSVP

Internetwork: Packages data into IP datagrams, which contain source and destination address information that is used to forward the datagrams between hosts and across networks. Performs routing of IP datagrams. 

• Protocols: IP, ICMP, ARP, RARP

Network Interface: Specifies details of how data is physically sent through the network, including how bits are electrically signaled by hardware devices that interface directly with a network medium, such as coaxial cable, optical fiber, or twisted-pair copper wire. 

• Protocols: Ethernet, Token Ring, FDDI, X.25, Frame Relay, RS-232, v.35

The TCP/IP model and related protocols are maintained by the Internet Engineering Task Force (IETF).

Src: http://technet.microsoft.com/en-us/library/cc786900(v=ws.10).aspx
Src: http://en.wikipedia.org/wiki/Internet_protocol_suite

If you want to go deep into how each layers function please refer Microsoft's Article