A data transmission method and network system are provided. The data transmission method is applied to a data center when a data packet can't be transmitted from the first virtual machine of a first server to the second virtual machine of a second server due to the data center occurring lookup fail. The data transmission method includes the steps of transmitting the data packet through a downlink port of a first TOR switch according to an ISID; encapsulating the data packet and setting a CVID to a first value; transmitting the encapsulated data packet to a first spine switch; and transmitting the encapsulated data packet to the second virtual machine by the first spine switch according to the flooding information, wherein the flooding information is generated according to an f-BVID.