This application provides an example label forwarding entry generation method, applied to a first network device. The method includes obtaining a first packet sent by a second network device, where the first packet carries an address of a third network device and a prefix segment identifier of the third network device, the first network device and the second network device belong to a first area, and the third network device belongs to a second area. The method also includes determining a routing entry that matches the address of the third network device, where the routing entry includes an address of a next-hop network device of the first network device. The method further includes generating a label forwarding entry based on the prefix segment identifier and the address of the next-hop network device.