An apparatus and method is disclosed for reducing the computational overhead incurred by a host processor during packet processing and improving network performance by adding additional functionality to a Network Interface Controller (NIC). Under certain circumstances the NIC coalesces multiple receive packets into a single coalesced packet stored within a coalesce buffer in host memory. The coalesced packet includes an Ethernet header, a coalesced Internet Protocol (IP) header, a coalesced Transmission Control Protocol (TCP) header, and a coalesced TCP payload containing the TCP payloads of the multiple receive packets. By coalescing received packets into fewer larger coalesced packets within the host memory, the host software needed to process a receive packet will be invoked less often, meaning that less processor overhead is incurred in the host.