Abstract: A technique for adapting receiver thresholds to improve rate-based flow control in a data communications network. With this invention, the flow control process becomes self-calibrating such that threshold values are dynamically adjusted to adapt to current network conditions, without requiring user intervention. Several different indicators of network conditions are monitored, and appropriate adjustments are made to the threshold(s) upon detecting these specific indicators. One monitor enables the threshold to increase when the network is uncongested, enabling the sender to increase its transmission rate. Conversely, the threshold is lowered if the network is congested, so that the transmission rate will be decreased. Another monitor balances bandwidth allocation among connections sharing a bottleneck resource, by lowering the threshold (and therefore decreasing the send rate) when a connection uses a high share of the resource.