An I/O board of a VXLAN switch searches out a layer 3 entry; when an egress port in the layer 3 entry is a VXLAN tunnel port, modifies a source MAC address of the packet into a gateway MAC address of the VXLAN switch, modifies a destination MAC address of the packet into a MAC address in the layer 3 entry, and sends the packet to a fabric board of the VXLAN switch. The fabric board determines to perform layer 2 forwarding for the packet, searches out a MAC entry, and when an egress port in the MAC entry is a VXLAN tunnel port, sends the packet to an I/O board associated with the egress port in the MAC entry. The I/O board associated with the egress port adds VXLAN encapsulation to the packet and forwards the packet with the VXLAN encapsulation to a VXLAN.