A packet transmission method includes a first virtual extensible local area network tunnel endpoint (VTEP) receiving a first packet from a first host and sending a second packet to a third VTEP based on a first IP address corresponding to the first host, where the second packet is obtained by the first VTEP by encapsulating the first packet, where the first host is multi-homed to a second VTEP and the first VTEP, where the second VTEP is configured to send a packet from the first host to the third VTEP based on a second Internet Protocol (IP) address corresponding to the first host, and where the first IP address is the same as the second IP address.