In an embodiment, a computer-implemented method for enabling multitenancy for service machines is disclosed. In an embodiment, the method comprises detecting a packet by a service insertion module implemented in a hypervisor. Based on metadata received along with the packet, the service insertion module determines a tenant identifier of a tenant that sent the packet. The service insertion module also determines a plurality of attributes of the packet. Based on the tenant identifier and the plurality of attributes of the packet, an action for the packet is retrieved from a rule table. Based on the action, the service insertion module determines whether at least one service is to be applied to the packet. In response to determining that at least one service is to be applied to the packet, an encapsulated packet is generated by encapsulating the packet with the tenant identifier, and the encapsulated packet is redirected to a service machine that is configured to provide the at least one service to the packet. Upon receiving a result from the service machine, the service insertion module determines, based on the result, whether to forward the packet toward a packet destination; and in response to determining that the packet is to be forwarded toward the packet destination, the packet is forwarded toward the packet destination.