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A Mobile Ad hoc NETwork (MANET) is a group of mobile nodes that form a multihop wireless network. The topology of the network can change randomly due to unpredictable mobility of nodes and propagation characteristics. Previously, it was assumed that the nodes in the network were assigned IP addresses a priori. This may not be feasible as nodes can enter and leave the network dynamically. A dynamic IP address assignment protocol like DHCP requires centralized servers that may not be present in MANETs. Hence, we propose a distributed protocol for dynamic IP address assignment to nodes in MANETs. The proposed solution guarantees unique IP address assignment under a variety of network conditions including message losses, network partitioning and merging. Simulation results show that the protocol incurs low latency and communication overhead for an IP address assignment.