Disclosed herein are a system and method for network protocol offloading in virtual networks. An embodiment method of offloading a network protocol processing task for a message includes receiving, at a virtual switch, the message from a virtual source node destined for a virtual receiver node. The network protocol processing for the message is offloaded from the virtual source node and deferred when the virtual receiver node is safe for network protocol offloading. When the virtual receiver node is unsafe for network protocol offloading, the network protocol processing task is executed within the virtual switch. When the virtual receiver node is safe for network protocol offloading and a path between the virtual switch and the virtual receiver node includes a physical network interface, the network protocol processing task is executed using the physical network interface.