The OSI (Open Systems Interconnection) model is a conceptual framework used to understand network interactions in seven distinct layers. IP (Internet Protocol) addresses are part of Layer 3, known as the Network Layer. This layer is responsible for packet forwarding, including routing through intermediate routers, and it handles the logical addressing scheme of the network to ensure that packets can be routed across multiple networks and reach their destination. IP addresses provide unique identifiers for network interfaces, allowing for communication between devices on a network or across different networks.