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My router has 4 LAN ports and they are all occupied. How can I increase the capacity of that router?

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Buy a network switch if you have constraints for switching to a router with a wireless access point.

A network switch is usually a 4/8/16/48-port 802.3 (Ethernet) device that extends the broadcast domain of your network. Most off-the-shelves consumer switches do not require much configuration and is straightforward to set up.

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    Just to clarify, and give a horribly over simplifed explination, you use a network switch just like how you use a power strip to give you more outlets. Just unplug one of your currently connected computers, plug it in to the switch, then use a short cable to connect the router to the switch. You may need to plug it in to a specific port called the Crossover or Uplink port, however most nicer switches will do this automatically.
    – Scott Chamberlain
    Commented Oct 7, 2011 at 15:53
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    In my opinion there's one more thing what needs to be included in this answer to be really nice: The bottleneck made by adding the switch. In the current set-up each computer can use maximum available speed to communicate to another computer and all if fine, but if you have say two computers behind switch, both of them won't be able to communicate through switch at thee full speed to the computers on the other side because the switch is connected only at one point to the router.
    – AndrejaKo
    Commented Oct 7, 2011 at 17:06
  • Expensive switches solve this by providing a specialized up-link port, but in a home set-up this would be too expensive and probably unnecessary.
    – AndrejaKo
    Commented Oct 7, 2011 at 17:07
  • @AndrejaKo i understand but what i wanted to connect is an network drive.
    – Rushino
    Commented Oct 7, 2011 at 17:46
  • @Rushino Actually, that's not important. It just means that the effect will be much lower, since network drives usually can't saturate network connection on their own. Remember, network drive is a computer too, it just isn't a general purpose computer.
    – AndrejaKo
    Commented Oct 7, 2011 at 17:49
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To complement Jin's answer, if you have any old routers laying around they are also perfectly capable of functioning as switches. You would usually do the following to turn the router into a switch:

  1. Disable DHCP service on it.
  2. Assign a static IP to it that's outside the IP range given by your first router's DHCP service but still within your network's subnet. This step provides a way for you to get into your second router later if you need.
  3. Connect a regular ethernet cable from your first router's lan to your second router's(now a switch) lan port.

Note that routers typically have less lan ports compared to a full-fledge switch but this provides another way to expand your network. If the second router is wifi capable it can also double as a secondary Access Point to expand your wifi coverage.

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Like Jin said, a network switch is the best way to increase wired network connections.

Alternatively use Wireless to connect to your router! and then you have no problems on how many can connect.

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    That's not completely true. Adding more wireless devices degrades the condition of the whole network and lowers the speed of each individual device in cases when all devices need to work at full speed. From my experience, the problems are greater than in the case when there's a router connected to a switch.
    – AndrejaKo
    Commented Oct 7, 2011 at 17:10
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    @AndrejaKo Can you explain a bit on how adding more wireless devices can degrade the whole network? To be sure, a LAN node connected to a WLAN node would likely be limited by the wifi connection -- wifi have move overhead than connected via ethernet. Also, as more wifi devices connect, the freq channel will be more saturated so it's not scalable. However, this shouldn't impact LAN-to-LAN ethernet performance?
    – greatwolf
    Commented Oct 7, 2011 at 20:27
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    @Victor T. I'm sorry, I didn't express myself clearly. I meant WLAN channel saturation and the "whole network" should have been more precisely "whole WLAN running on that channel". There shouldn't be major impact on LAN-LAN performance. If you have WLAN connected to LAN and then further on, the computers on WLAN will put more load on LAN segment when they need to communicate with it as their number increases, but I don't thing that impact would be significant, so I didn't even want to mention it at the time I wrote the comment.
    – AndrejaKo
    Commented Oct 7, 2011 at 21:13

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