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A Layer 3 switch combines Ethernet switching with IP routing. It can forward traffic within a local network using MAC addresses and route traffic between IP subnets, including between VLANs, using destination IP addresses and routing information.
What a Layer 3 switch does
A Layer 3 switch handles two kinds of forwarding. For devices in the same VLAN and subnet, it forwards Ethernet frames according to MAC addresses. When traffic is destined for a different subnet, it makes a routing decision based on the destination IP address and its available routes or next-hop information.
That lets the switch route traffic between subnets directly, rather than sending every such packet to a separate router. A common example is inter-VLAN routing on a local-area network. Cisco describes Layer 3 switching as routing at switching speed, while noting that performance and behavior depend on the device and configuration (Cisco: Use Layer 3 Switching).
How a packet crosses from one subnet to another
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A device sends a packet addressed to an IP address outside its local subnet to its configured default gateway.
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The Layer 3 switch checks the destination IP address against its routing information and selects a route and next hop.
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The switch forwards the packet toward that next hop, placing it in a new Layer 2 frame for the next network segment. In the documented case, the Ethernet frame fields change while the packet’s source and destination IP addresses remain the same (Cisco: IP Routing and Layer 3 Switching).
The route is the selected path information; forwarding is the act of sending the packet along that path. Cisco describes Layer 3 switching as forwarding traffic between subnets and explains the relationship between routing and switching in its technical documentation (Cisco: IP Routing and Layer 3 Switching).
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Layer 2 switch, Layer 3 switch, and router
| Device or function | What it does | Typical use |
|---|---|---|
| Layer 2 switch | Forwards Ethernet frames within a Layer 2 network using MAC addresses. | Connecting devices that communicate within the same VLAN or subnet. |
| Layer 3 switch | Switches Ethernet frames and routes IP traffic between subnets. | Routing between VLANs or other local subnets. |
| Router | Routes IP traffic between networks. | Connecting networks; its exact additional functions depend on the model and configuration. |
These labels describe functions, not mutually exclusive boxes. A Layer 3 switch performs routing, and some routers also provide switching functions. A Layer 2 switch alone does not make IP routing decisions between subnets (Cisco: Use Layer 3 Switching; Cisco: Layer 2 Switching).
What “switching speed” does—and does not—promise
Many Layer 3 switches use hardware to forward eligible routed traffic. That does not mean every feature or packet is necessarily forwarded in hardware, or that every model delivers the same capacity. Cisco notes in its Catalyst 6500 Release 12.2SX guide that hardware Layer 3 switching does not replace routing protocols configured on the route processor; traffic that cannot be hardware-switched may be handled by the route processor instead (Cisco Catalyst 6500 Release 12.2SX Software Configuration Guide: IP Unicast Layer 3 Switching).
Check the documentation for the exact model and software release before relying on a routing protocol, feature, throughput figure, or line-rate claim. Support and capacity vary by product.
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When to consider a Layer 3 switch
Consider one when the local network needs to route traffic among VLANs or other IP subnets at the switching layer. Before selecting equipment, verify:
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Whether inter-VLAN or other inter-subnet routing is required.
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Which routing features and protocols the model supports.
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Whether its port count and media match the devices and links you need.
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Whether its documented forwarding capacity meets the network’s requirements.
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Whether its management and security features suit the deployment.
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Where it will sit in the network, such as the access, distribution, or core layer.
Do not assume that a managed switch supports Layer 3 routing: confirm inter-subnet routing in the product documentation. Nor should a Layer 3 switch automatically be treated as a replacement for an edge router; the right role depends on the required routing features and network design.
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