This application provides a packet processing method, including: receiving, by a current network node, a first packet; determining, by the current network node, a flow identification corresponding to the first packet, where the first packet does not include the flow identification; obtaining, by the current network node based on the first packet and the flow identification, a second packet, where the second packet includes the flow identification and an IOAM header, and in the second packet, the flow identification is located before the IOAM header; and sending, by the current network node, the second packet to a next network node. This resolves a problem that as a quantity of passed IOAM nodes increases, traffic classification performed by a subsequent node consumes a longer delay, thereby deteriorating forwarding performance.