Transactional application processing in a distributed environment using an application-aware network infrastructure element is described. In an embodiment, an apparatus comprises a plurality of network interfaces, forwarding logic, and transaction manager logic. The plurality of network interfaces is operable to communicatively connect to one or more packet-switched networks. The forwarding logic is coupled to the plurality of network interfaces and, when executed, is operable to receive packet flows therefrom and to forward the packet flows thereto. The transaction manager logic is encoded in one or more tangible media for execution and when executed is operable to: receive first information that specifies one or more remote resources associated with an extended transaction, where the extended transaction comprises a plurality of child transactions; and reserve the one or more remote resources by sending out one or more reservation requests over a network management protocol.