A network protocol that encapsulates packets at a peer level or below. It is used to transport multiple protocols over a common network as well as provide the vehicle for encrypted virtual private networks (VPNs). It is said to "tunnel" because it "pushes through" packets of different types.
Encapsulate Same or Lower Layer
In a regular protocol, the lower layer protocol encapsulates packets from the higher level protocol. For example, a network layer 3 packet encapsulates a transport layer 4 packet, and a data link layer 2 packet encapsulates a network layer 3 packet.
In contrast, a tunneling protocol encapsulates a packet of the same or lower layer. For example, generic routing encapsulation (GRE) can contain a layer 3 IPX packet within a layer 3 IP packet. A virtual private LAN service (VPLS) encapsulates a layer 2 Ethernet frame within a layer 3 IP packet. See IP tunneling