Asynchronous transfer mode (ATM) is a packet switched data transport system based on short, fixed length cells. Each cell carries a virtual channel indicator (VCI) and virtual path indicator (VPI) in its header. Essential to the services offered by the ATM networks is the ATM adaptation layer (AAL), an ITU-TSS defined layer that adapts the cell-based ATM physical layer to packet, datagram, or bit-stream-oriented higher layers. Failure modes causing cell loss along a virtual connection are examined, and the ways AALs cope are analyzed. The sources of cell loss and their effects on AAL3/4 or AAL5 type of service are described. The usefulness of the ability of AAL3/4 to pass fragments of corrupted data up to higher layer protocols is discussed, and the implementation of selective cell discarding within switching nodes is considered, and the limitations imposed by each AAL are examined. >