The novel method and system for classifying packets through the use of filters combines heuristic tree search with the use of filter buckets. This provides high performance and reasonable storage requirement, even when applied to large number of filters (from 4K to 1 million). In addition, the novel method can adapt to the input packet distribution by taking into account the relative filter usage. The capability of employing a large number of filters in a packet classifciation system is useful in providing value-added services, such as security, quality of service (QoS), load balancing, and traffic accounting.