An intermediate network device performs service aware path selection. For example, the intermediate network device comprises a network interface that receives network traffic and a control unit that couples to the network interface. The control unit comprises a storage medium that stores a first set of cost factors for a first path from the intermediate network device to another intermediate network device. The first set of cost factors includes at least one optimization cost factor corresponding to intermediate optimization capabilities available to the intermediate network device that offset other cost factors of the first set. The storage medium also stores a second set of cost factors for a second path between the devices. The control unit selects either the first path or the second path over which to forward the network traffic based on the first and second sets of cost factors.