The availability and low cost of 802.11b wireless networking products have encouraged a rapid growth in deployments of wireless LANs. As the use of powerful portable computing devices (laptops, PDAs) with WLAN adapters becomes a common expectation, the ability of wireless LANs to cater for large numbers of users with high bandwidth requirements is an increasingly important design consideration. To date, most of the deployed large WLANs were designed for continuous radio coverage, not for high densities of bandwidth-hungry users. In this paper, we report on the results of an experimental and analytical study specifically addressing the problem of designing high density WLANs based on the 802.11b technology. We conclude that in the design of high-density WLANs, due to the limited control over transmission ranges of the wireless devices, particular attention must be paid to means by which the effect of exposed terminals in the network can be reduced.