How to configure Linux machine as router?

Here are some simple steps to do it, using Network Address Translation (NAT)

1. Enable packet forwarding . Make it permanent by adding "net.ipv4.ip_forward = 1" to /etc/sysctl.conf
   
   echo "1" > /proc/sys/net/ipv4/ip_forward
   
   
2. Enable iptables to handle NAT. ( eth0 is the public connection )
   
   /sbin/iptables -t nat -A POSTROUTING -o eth0 -j MASQUERADE
   
   
3. Save iptables settings
   
   service iptables save
   
   
4. Done. Check by routing table by verifying "netstat -nr" and iptables rules by "iptables -L"
   

This is a simple method for Redhat Enterprise Linux. See iptables docs for more detailed info.