350-601 Network Practice Question
In a VXLAN environment, what is the function of a VTEP?
⚠ Common exam trap
Cisco often tests the distinction between the VTEP's core encapsulation/decapsulation role and the separate functions of multicast group management, DHCP services, or Layer 3 routing, leading candidates to confuse the VTEP with a VXLAN gateway or a multicast router.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
It encapsulates and decapsulates VXLAN packets
A VTEP (VXLAN Tunnel Endpoint) is the device that performs VXLAN encapsulation and decapsulation. It takes an original Layer 2 frame, adds a VXLAN header (with a VNI to identify the tenant segment), a UDP header (port 4789), and an outer IP/Ethernet header, then sends the packet over the underlay network. On the receiving side, the VTEP strips these headers and forwards the original frame to the destination host. This encapsulation/decapsulation function is the core purpose of a VTEP in a VXLAN environment.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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It manages the VXLAN multicast groups
Why it's wrong here
Multicast group management may be done by the underlay, not the VTEP.
- ✓
It encapsulates and decapsulates VXLAN packets
Why this is correct
VTEP is responsible for VXLAN encapsulation/decapsulation.
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It acts as a DHCP server for tenant VMs
Why it's wrong here
DHCP is separate from VXLAN.
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It provides Layer 3 routing between VXLAN segments
Why it's wrong here
Routing between VXLAN segments is done by a gateway, but VTEP performs encapsulation.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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