Pseudowires require that the ingress and egress PE devices use common service-specific techniques to encapsulate the customer Layer 2 data. The ingress PE encapsulates the data in accordance to the Martini draft proposal, attaches a virtual circuit (VC) label and a tunnel label, and forwards the packet over the LSP. MPLS L2VPN encapsulation and transport shows the encapsulation and data transport.

Figure 1. MPLS L2VPN encapsulation and transport

When the MPLS packet arrives at the egress PE, the egress PE uses the VC label to deliver the data to the correct CE device with the appropriate Layer 2 encapsulation.