MPLS and IP

MPLS works in conjunction with IP and its routing protocols, such as the Interior Gateway Protocol (IGP). MPLS LSPs provide dynamic, transparent virtual networks with support for traffic engineering, the ability to transport layer-3 (IP) VPNs with overlapping address spaces, and support for layer-2 pseudowires using Pseudowire Emulation Edge-to-Edge(PWE3)[15] that are capable of transporting a variety of transport payloads (IPv4, IPv6, ATM, Frame Relay, etc.). MPLS-capable devices are referred to as LSRs. The paths an LSR knows can be defined using explicit hop-by-hop configuration, or are dynamically routed by the constrained shortest path first (CSPF) algorithm, or are configured as a loose route that avoids a particular IP address or that is partly explicit and partly dynamic.