A method and apparatus for reassembling packets using a limited number of reassembly contexts is presented. Upon receipt of a first cell of a packet corresponding to a selected source, a reassembly context is allocated to the selected source. The reassembly context is allocated from a limited set of reassembly contexts. The first cell is then stored in a buffer and the reassembly context is updated to reflect the storage of the first cell in the buffer. As subsequent cells of the packet are received they are stored in the buffer and the reassembly context is updated to reflect the storage of each of these subsequent cells. When an end of message cell is received for the packet that indicates the end of the packet, reassembly of the packet within the buffer is completed to produce a reassembled packet. The reassembled packet is then queued for transmission to a destination, and the reassembly context is deallocated such that is can be used for reassembly of a subsequently received packet.