Method and apparatus for avoiding receive livelock and transmit starvation, and for minimizing packet loss and latency in a communication network station. The invention uses a combination of processing threads, polling and, in a preferred embodiment, a judicious use of interrupts, to allocate the use of processing resources fairly among competing functions. Real time processing threads are structured to execute for a preselected maximum time interval, based on numbers of units processed by each thread, and then to yield control to a thread scheduler, which selects and invokes a new thread for execution. Work to be done in the various threads is determined either by polling or by an interrupt system, and then posted to the threads for execution.; If interrupts are used, interrupt service routines perform only the minimal processing needed to recognize an interrupt, other interrupt servicing functions being deferred for execution in a processing thread. The thread scheduler operates on a round-robin basis and also selects from at least one general purpose processing thread for functions that are less time critical, the general purpose thread being structured to operate for a selected minimum time, if needed, in a non-preemptable mode, and thereafter in a preemptable mode.