A NAS unit is essentially a self-contained computer connected to a network, with the sole purpose of supplying file-based data storage services to other devices on the network. The operating system and other software on the NAS unit provide the functionality of data storage, file systems, and access to files, and the management of these functionalities. The unit is not designed to carry out general-purpose computing tasks, although it may technically be possible to run other software on it. NAS units usually do not have a keyboard or display, and are controlled and configured over the network, often by connecting a browser to their network address. The alternative to NAS storage on a network is to use a computer as a file server. In its most basic form a dedicated file server is no more than a NAS unit with keyboard and display and an operating system which, while optimised for providing storage services, can run other tasks; however, file servers are increasingly used to supply other functionality, such as supplying database services, email services, and so on.

A general-purpose operating system is not needed on a NAS device, and often minimal-functionality or stripped-down operating systems are used. For example FreeNAS, which is Free / open source NAS software designed for use on standard computer hardware, is just a version of FreeBSD with all functionality not related to data storage stripped out. NASLite is a highly optimized Linux distribution running from a floppy disk for the sole purpose of a NAS. Likewise, NexentaStor is based upon the core of the NexentaOS, a Free / open source hybrid operating system with an OpenSolaris core and a GNU user environment.

NAS systems contain one or more hard disks, often arranged into logical, redundant storage containers or RAID arrays (redundant arrays of inexpensive/independent disks). NAS removes the responsibility of file serving from other servers on the network.

NAS uses file-based protocols such as NFS (popular on UNIX systems) or SMB/CIFS (Server Message Block/Common Internet File System) (used with MS Windows systems). NAS units rarely limit clients to a single protocol.

NAS provides both storage and filesystem. This is often contrasted with SAN (Storage Area Network), which provides only block-based storage and leaves filesystem concerns on the "client" side. SAN protocols are SCSI, Fibre Channel, iSCSI, ATA over Ethernet (AoE), or HyperSCSI.

Despite differences SAN and NAS are not exclusive and may be combined in one solution: SAN-NAS hybrid

The boundaries between NAS and SAN systems are starting to overlap, with some products making the obvious next evolution and offering both file level protocols (NAS) and block level protocols (SAN) from the same system. However a SAN device is usually served through NAS as one large flat file, not as a true filesystem. An example of this is Openfiler, a free software product running on Linux.