This paper describes the hardware design of core functions of the Internet protocol IP over IEEE1394 interface (IP over 1394) and its implementation on an FPGA. The design was evaluated by counting the number of FPGA logic elements required for the implementation. Using a system clock of 49.152MHz, we verified that packets sent from an application on top of the protocol stack were correctly received by the other protocol stack via the IEEE1394 port at a transfer rate of 400 Mbps. We also verified the communication behaviors of the design with an isochronous resource manager to reserve a channel prior to data transmissions. The hardware cost of the core IP layer was less than that of the link layer. The evaluation results will help the IP-over-1394 designers explore quantitatively various spectrum of the software/hardware design alternatives.