I/O board of a VXLAN switch removes VXLAN encapsulation from a packet, determines to perform layer 3 forwarding for the packet and sends the packet to a fabric board of the VXLAN switch. The fabric board determines to perform layer 3 forwarding for the packet, searches out a layer 3 entry matching a destination IP address of the packet from a local layer 3 table, 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 destination MAC address in the layer 3 entry, and when an egress port in the layer 3 entry is a VLAN port, sends the packet to an I/O board associated with the egress port. The I/O board associated with the egress port forwards the packet to a VLAN via the egress port in the layer 3 entry.