A CSU/DSU (Channel Service Unit/Data Service Unit) is a hardware device about the size of an external modem that converts digital data frames from the communications technology used on a local area network (LAN) into frames appropriate to a wide-area network (WAN) and vice versa. For example, if you have a Web business from your own home and have leased a digital line (perhaps a T-1 or fractional T-1 line) to a phone company or a gateway at an Internet service provider, you have a CSU/DSU at your end and the phone company or gateway host has a CSU/DSU at its end.
The Channel Service Unit (CSU) receives and transmits signals from and to the WAN line and provides a barrier for electrical interference from either side of the unit. The CSU can also echo loopback signals from the phone company for testing purposes. The Data Service Unit (DSU) manages line control, and converts input and output between RS-232C, RS-449, or V.35 frames from the LAN and the time-division multiplexed (TDM) DSX frames on the T-1 line. The DSU manages timing errors and signal regeneration. The DSU provides a modem-like interface between the computer as Data Terminal Equipment (DTE) and the CSU.