A network overlay system can include a data transport module having a network interface and a translation module configured to generate offload processing addresses for the network packet data; a system bus; at least one host processor connected to the system bus; and at least one offload processor module coupled to the system bus and configured to receive network packet data associated. Offload processor modules include processing circuits associated with at least one of the offload processing addresses that are configured to encapsulate the network packet data for transport on a logical network or decapsulate the network packet data received from the logical network. The offload processing circuits encapsulate or decapsulate network packet data independent of any host processor.