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Employing channel state information at the network layer, efficient routing protocols for equal-power and optimal-power allocation in a multihop network in fading are proposed. The end-to-end outage probability from source to destination is used as the optimization criterion. The problem of finding the optimal route is investigated under either known mean channel state information (CSI) or known instantaneous CSI. The analysis shows that the proposed routing strategy achieves full diversity order, equal to the total number of nodes in the network excluding the destination, only when instantaneous CSI is known and used. The optimal routing algorithm requires a centralized exhaustive search which leads to an exponential complexity, which is infeasible for large networks. An algorithm of polynomial complexity for a centralized environment is developed by reducing the search space. A distributed approach based on the Bellman-Ford routing algorithm is proposed which achieves a good implementation complexity-performance trade-off.