Abstract--This paper investigates the hidden-node phenomenon (HN) that arises in IEEE 802.11 wireless networks. HN can cause many performance problems, including throughput degradation, unfair throughput distribution among flows, and throughput instability. Previous investigations mostly focus on methods to alleviate these performance problems rather than direct elimination of HN. Such an approach may solve one but not all of these problems. This paper is a first attempt to identify the fundamental conditions leading to HN. In particular, we show that HN arises fundamentally as a result of the 802.11 protocol constraints. Based on the insight obtained from the analysis, we devise a Hidden-node-Free Design (HFD) that completely removes HN. Readers who are only interested in the results, but not the derivations, may skip Section 3.