Cisco IOS Cookbook, 2nd Edition

Creating a Tunnel

Problem

You want to tunnel IP traffic through your network.

Solution

The basic GRE tunnel configuration is simply a matter of defining the source and destination addresses or interfaces on both devices. On the first router, you need to create the tunnel interface and define its source and destination:

Router1#configure terminal 
Enter configuration commands, one per line.  End with CNTL/Z.
Router1(config)#interface Tunnel1
Router1(config-if)#ip address 192.168.35.6 255.255.255.252
Router1(config-if)#tunnel source 172.25.1.5
Router1(config-if)#tunnel destination 172.25.1.7
Router1(config-if)#exit
Router1(config)#end
Router1#

Then, on the other router you must create a tunnel interface with a matching source and destination:

Router5#configure terminal 
Enter configuration commands, one per line.  End with CNTL/Z.
Router5(config)#interface Tunnel3
Router5(config-if)#ip address 192.168.35.5 255.255.255.252
Router5(config-if)#tunnel source 172.25.1.7
Router5(config-if)#tunnel destination 172.25.1.5
Router5(config-if)#exit
Router5(config)#end
Router5#

Discussion

Creating a basic tunnel is very simple—you just need to define a source and destination on each of two routers. When you do this, as with any other virtual interface such as subinterfaces and loopback interfaces, there is an additional memory requirement on the router. However, the CPU overhead is not as bad as you might initially think. This is because GRE tunnels do work well with Cisco Express Forwarding (CEF). So the ...