What is a Residential Proxy? The Complete 2025 Guide

In this tutorial, you will learn:

●  What are residential proxies?

●  Residential Proxies vs. Other Proxy Types

●  Common use cases: SEO monitoring, ad verification, social media, and e-commerce.

What are residential proxies (definition & basics)

A residential proxy is an IP address assigned by an Internet Service Provider (ISP) to a household device, such as a computer or smartphone. When you connect to the internet using a residential proxy, websites interpret your connection as if it were coming from a regular user instead of a proxy or server.

👉 In simple terms: A residential proxy disguises your online identity by routing traffic through legitimate, ISP-issued addresses, offering authenticity and reliability.

What is a residential IP?

Residential IPs are associated with physical devices, including mobile phones, tablets, and computers. These IP addresses are assigned by Internet Service Providers (ISPs) and are registered in public databases, enabling websites to identify the device’s ISP, network, and geographic location.

How residential proxies work

Residential proxies act as middle layers between your device and the target website.

Step-by-step process:

1. You send a request (e.g., opening a product page).

2. The proxy replaces your real IP with a residential IP.

3. The website reads the residential IP, assuming it belongs to a normal user.

4. Data returns to you safely and anonymously.

What are dedicated residential proxies?

Another common type is dedicated residential proxies; these private proxies deserve their own separate explanation for how common they are, especially in the web scraping world.

Dedicated residential proxies are gateways that you route your traffic through, just like other types of proxies. The difference is that these specific proxies provide you with IP addresses that are exclusively yours, with no one else accessing them.

With that, dedicated residential proxies are the way to go if your priority is speed, privacy, and reliability. The only downsides are the price (they can get quite expensive) and the complexity of the setup process, requiring a certain level of technical expertise. In terms of web scraping, dedicated residential proxies are often used to work with complex targets, especially if you weren’t able to retrieve public data with other types of proxies and got blocked by a website.

Datacenter vs. Other Proxy Types

Mobile Proxies

These proxies use IP addresses assigned to mobile devices. They are similar to residential proxies in their high trust level, but come from mobile carriers. They’re great for activities that require changing IP addresses frequently since they’re less likely to be blocked, due to the nature of mobile IP addresses constantly changing as people move around. The biggest disadvantage of these proxies is the cost, which tends to be much higher than residential proxies without real advantages, except in very specific use cases that REQUIRE mobile IPs.

ISP Proxies

ISP proxies are a great alternative to residential proxies, but not in all cases. The way they work is very similar to residential proxies: you are getting IPs from an ISP, but in this case directly. Usually, these proxies are a bit more expensive than residential and come with geo limitations. Even the top proxy providers can’t work with ALL ISPs directly, so the available countries are limited.

On the other hand, residential proxies are usually available from all 195 countries, as end users (IP providers) are everywhere across the globe. Now let’s take a look at the legal side of residential proxies and try to understand — is it really legal to use someone else’s IP?

When to Choose a Residential Proxy

Residential proxies matter because they bridge trust and accessibility online. Websites are constantly blocking suspicious traffic, but residential IPs appear legitimate.

For tasks requiring high levels of anonymity without being detected as proxy use, such as competitive intelligence gathering or large-scale web scraping.

When needing to appear as a real user from a specific location for testing websites or accessing region-locked content.

When you need to control the IP on ONLY 1 application, and not the whole network.

Different business use cases.

Pros of residential proxies

High trust rate—seen as real users by websites.

Geo-targeting precision—access localized search results or retail prices.

Reduced CAPTCHA—fewer interruptions when scraping.

Flexibility—works for SEO, social media, e-commerce, adtech, and more.

Scalable IP pools—millions of addresses ensure rotation and continuity.

Top residential proxy providers in 2025

1. Thordata

●  Strengths:Global residential proxy pool

●  Best for: enterprise scraping, global SEO, multi-account automation

●  Website: Thordata

2. Oxylabs

● AI-driven IP rotation, near-zero blocks, compliant sourcing

●  Advanced tools for web scraping

●  Higher pricing vs. Thordata

●  Website: oxylabs

3. DECODO

●  Affordable pricing plans

●  Ideal for small teams and freelancers

●  Website: DECODO

4. Bright Data

●  Premium targeting options

●  Expensive compared to competitors

Website: Brightdata

5. NetNut

Static residential proxies

Useful for persistent sessions

Website: Netnut

Best practices when using residential proxies

Rotate IPs frequently to avoid bans.

Test speed and stability before scaling.

Use geo-matching to align with target markets.

Ensure compliance with laws like GDPR.

Protect login credentials to avoid leaks.

How to set up residential proxies

Setting up Thordata’s residential proxies is as simple and quick as 1-2-3! To get started:

Sign up for an account on Thordata’s dashboard, find residential proxies by choosing Residential on the left panel, and choose a plan that suits your needs.

Open the Proxy setup tab to configure your residential proxies and copy their endpoints. Check our help documentation for more information.

Choose the device or application you want to use the proxy with and follow the instructions for setting it up. Decodo offers detailed setup guides for various third-party tools.

Once you’ve successfully set up your proxy, you’re ready to leverage all the benefits!

If you run into any issues during setup, chat with our 24/7 tech support via LiveChat.

Residential proxy compliance & ethics in 2025

Using proxies responsibly is critical:

GDPR compliance ensures user data protection.

Ethical sourcing of IPs prevents misuse.

Avoiding black-hat activities (spamming, credential theft) maintains trust.

Future of residential proxies (AI, automation, regulation)

AI-driven rotation will optimize proxy allocation in real time.

Integration with AI agents (e.g., autonomous scrapers).

Regulations may become stricter, requiring more stringent compliance.

Conclusion

Residential proxies have become essential tools for SEO, e-commerce, security, and automation. Their ability to mimic real users while offering scalability makes them the backbone of modern web data strategies.

For businesses in 2025, the best option is Thordata—combining vast IP coverage, AI-powered systems, and ethical compliance.