Abstract: Ethernet is rapidly expanding beyond its niche of local area networks. However, its success in larger metropolitan area networks will be determined by its ability to combine simplicity, low costs and quality of service. A key element in successfully transporting bursty traffic and at the same time providing QoS, is congestion control. The Ethernet standard IEEE 802.3x defines a hop-by-hop congestion control mechanism. The performance of this scheme depends on its interaction with higher layer application traffic especially, TCP controlled traffic which has its own end-to-end congestion control mechanism. The interaction of these two schemes will determine the usefulness of the Ethernet hop-by-hop flow control mechanism. In the presentation we focus on the performance modeling and analysis of this interaction. This is studied by taking into account the influence of various network and traffic parameters. The validity of the proposed model is assessed by comparison of the results to simulations. It can be concluded from the results that increasing round trip time has a positive influence on the interaction of hop-by-hop and TCP congestion control and increasing the traffic load does not show significant benefit for the use of hop-by-hop flow control.