A method in a network device implements source address filtering, including gateway address filtering, to enable network devices to be configured in a true Ethernet ring network. By implementing source address filtering or source address filtering with gateway address filtering, a true ring network can be formed using Ethernet protocols where all the links between the network devices in the ring are active paths while avoiding data packets being switched endlessly around the ring. In one embodiment, a data packet in the true ring network is terminated when the source address of the data packet matches the local address of the network device. In another embodiment, a data packet in the true ring network is terminated when the source address of the data packet matches the address of the gateway switch connected to the network device.