An improved network intrusion detection and response system and method is disclosed for detecting and preventing misuse of network resources. More particularly, the system and method dynamically self-adjusts to changes in network activity using a plurality of alert levels wherein each successively higher alert level triggers a corresponding heightened security response from the networked computer being misused. These heightened alert levels are integrated on both the system (individual node) and the network level. The disclosed intrusion detection and response system is also implemented at low cost using currently-existing hardware and software (i.e., network computers).