We propose a new Markov model for the distributed coordination function (DCF) of IEEE 802.11. The model incorporates carrier sense, non-saturated traffic and SNR, for both basic and RTS/CTS access mechanisms. Analysis of the model shows that the throughput first increases, and then decreases with the number of active stations, suggesting the need for an admission control mechanism. We introduce such a mechanism, which tries to maximize the throughput while maintaining a fair allocation. The maximum achievable throughput is tracked by the mechanism as the number of active stations increases. An extensive performance analysis shows that the mechanism provides significant improvements.