An embodiment method of loop suppression in a layer-two transit network with multiprotocol label switching (MPLS) encapsulation includes receiving a packet at a provider edge (PE) router for the layer-two transit network. The packet is stored in a non-transitory memory on the PE router. The packet is stored according to a packet data structure having an MPLS label field and a layer-two header. A time-to-live (TTL) attribute is then determined for the packet. The TTL attribute is written to the non-transitory memory in the MPLS label field. The packet is then routed according to information in the layer-two header.