Cisco APIC Layer 3 Networking Configuration Guide, Release 6.2(x)

VXLAN in ACI

Updated: April 17, 2026

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Explains how VXLAN is used in ACI to extend Layer 2 segments over Layer 3 infrastructure, enabling scalable, flexible, and policy-driven data center networks.

VXLAN in ACI is a protocol that extends Layer 2 segments over Layer 3 infrastructure, enabling the creation of scalable and flexible overlay networks in data centers.

All traffic in the ACI fabric is normalized as VXLAN packets, encapsulating external VLAN, VXLAN, and NVGRE packets.
VXLAN enables isolated broadcast and failure bridge domains, reducing the risk of large failure domains.
The VXLAN header includes policy attributes and a 24-bit VNID, supporting up to 16 million unique Layer 2 segments.

VXLAN encapsulation and policy enforcement in ACI

VXLAN in ACI encapsulates various packet types and enforces policy attributes, allowing for distributed and consistent policy enforcement across the fabric.

Encapsulates external VLAN, VXLAN, and NVGRE packets into VXLAN packets at ingress.
Supports isolated broadcast and failure bridge domains in the overlay.
Decouples application policy EPG identity from forwarding, enabling flexible endpoint placement.

Ingress packets are encapsulated as VXLAN packets.
Policy attributes are carried in every packet for distributed enforcement.
Forwarding is not constrained by encapsulation type or overlay network.

Layer 2 MAC address: Source and destination fields for efficient forwarding.
Layer 3 IP address: Source and destination fields for scalable routing.
VNID: 24-bit field for up to 16 million unique segments.

Table 1. VXLAN and Traditional VLAN Comparison
Attributes	VXLAN	VLAN
Address Space	16 million segments (24-bit VNID)	4096 segments (12-bit VLAN ID)
Overlay Capability	Yes, over Layer 3	No, Layer 2 only

Note

VXLAN in Cisco ACI allows for scalable, policy-driven Layer 2 overlays across Layer 3 infrastructure, supporting large multitenant data centers.

Figure 1. Cisco ACI Encapsulation Normalization

Example: VXLAN Overlay in Cisco ACI

For example, an application endpoint host can be placed anywhere in the data center network, regardless of the Layer 3 boundary, and still maintain Layer 2 adjacency through the VXLAN overlay network in Cisco ACI.

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