At present, various communication protocols for an automotive distributed control multiplex system that aims at solving wire complexity and meeting the requirements of high reliability and open system flexibility have been proposed and installed in production cars.The requirements for an automotive distributed multiplex system, especially reliability, flexibility, and economy have been analyzed in detail, and as a result a new communication protocol based on SAE J-1850 has been developed. This paper describes the design philosophy and technical features of the protocol, named PALNET (Protocol for Automotive Local area Network) and the result of evaluation with the experimental system.PALNET covers moderate speed signals in vehicle electrical and electronic system. Main technical features of PALNET are as follows. Introduction of a new acknowledgement method named ANC (Acknowledgement for Network Control) secures high reliability of data communication. Moreover the method permits easy diagnosis of multiplex network. A fault tolerant physical layer, which concept was proposed in VNP by Ford Motor Company, is economically realized by means of a simple receiver circuit. Employment of the unique valid/invalid field in the data area enables the common signal allocation system among various car models. This is essentially important in view of universality. Protocol items are optimumly designed as a whole to satisfy design requirements. A custom LSI for data communication and a Hybrid IC module incorporating the LSI, bus-interface circuit, and oscillator have been developed as key-hardware of PALNET. They were evaluated in an experimental system, and proved to satisfy the design goals.