A method and network device are disclosed using a look-ahead watermark in a FIFO memory. In accordance with the present invention, a watermark interrupt is generated from a FIFO memory when data in the FIFO memory has crossed a watermark threshold. A data burst is transferred through a direct memory access unit to the FIFO memory. A look-ahead watermark flag is checked at the FIFO memory to determine if sufficient memory space exists inside the FIFO memory for an additional data burst, which is transferred through the direct memory access unit to the FIFO memory when the look-ahead watermark flag indicates that sufficient memory space is available.