segmentation seg·men·ta·tion (sěg'mən-tā'shən, -měn-)
(Or "segmentation and reassembly", SAR) Breaking an arbitrary size packet into smaller pieces at the transmitter. This may be necessary because of restrictions in the communications channel or to reduce latency. The pieces are joined back together in the right order at the receiver ("reassembly"). Segmentation may be performed by a router when routing a packet to a network with a smaller maximum packet size.
The term "segmentation" is used in ATM, in TCP/IP, it is called "fragmentation" an is performed at the IP layer before the "fragments" are passed to the transport layer.
See for example ATM forum UNI 4.0 specification.