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Layer 3 Switches: What They Do and When They Route Traffic

A Layer 3 switch combines MAC-based Ethernet switching with IP routing, allowing it to forward traffic between subnets and often between VLANs.
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A Layer 3 switch combines Ethernet switching with IP routing: it forwards frames within a local Layer 2 network and can route packets between different IP subnets, including VLANs. That lets it handle some traffic between network segments without sending every such packet to a separate router.

What a Layer 3 switch does

“Layer 3” refers to the network layer, where IP addresses and routes determine how packets travel between networks. A Layer 3 switch performs that routing as well as the Layer 2 switching used to move Ethernet frames within a local network. Inter-VLAN routing is a common use on a local-area network.

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Cisco describes Layer 3 switching as routing at switching speed. That describes the design goal, not a universal performance guarantee: forwarding capacity and supported features depend on the specific switch model and software.

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How it forwards traffic

Traffic within the same subnet

When a destination is on the same local subnet, the switch forwards the Ethernet frame using MAC addresses. This is ordinary Layer 2 switching.

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Traffic to another subnet

When a destination is on a different IP subnet, the packet needs a routing decision. The switch uses routing information, such as the destination network and next hop, to select where to send it. It can then forward the packet between subnets itself, often in hardware. In the case described in Cisco’s documentation, the switch updates the Layer 2 frame fields for the next hop while preserving the packet’s Layer 3 source and destination addresses. Cisco explains the packet-forwarding process.

Layer 2 switch, Layer 3 switch, and router

Device Typical role How it forwards
Layer 2 switch Connects devices within a Layer 2 network or VLAN. Uses MAC addresses to forward Ethernet frames.
Layer 3 switch Switches local Ethernet traffic and routes between IP subnets, often between VLANs. Uses MAC addresses for local switching and routing information for inter-subnet forwarding.
Router Routes traffic between IP networks. Uses Layer 3 routing information; some routers also provide switching functions.

These are overlapping capabilities, not mutually exclusive device types. A Layer 3 switch can route, while a router may also offer switching features. Whether a Layer 3 switch can take the place of a router at a particular network boundary depends on the required functions and the device’s capabilities.

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What “hardware routing” does—and does not—mean

Many Layer 3 switches can forward eligible routed traffic in hardware. This can make them useful for routing between LAN subnets, but it does not mean every packet or feature is handled at the same speed. Cisco’s Catalyst 6500 documentation notes that hardware Layer 3 switching does not replace routing protocols configured on the route processor; traffic that cannot be hardware-switched may instead be routed by that processor. Those details describe a specific product family and software release, so consult the documentation for the exact model and release you are considering.

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When a Layer 3 switch is useful

A Layer 3 switch is worth considering when a network needs to route traffic between subnets or VLANs within the LAN. Before choosing one, check:

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  • Whether inter-VLAN or other inter-subnet routing is required.
  • Which routing features and protocols the exact model supports.
  • Port count and media, forwarding capacity, and the switch’s intended place in the network, such as access, distribution, or core.
  • Whether its management and security features meet the deployment’s requirements.

Do not assume that every managed switch supports Layer 3 routing, or that every Layer 3 switch supports the same protocols and features. Verify the vendor’s documentation for the model and software release.

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