Layer 2 Switch vs Layer 3 Switch: Differences & Use Cases

Before deciding between a Layer 2 switch and a Layer 3 switch, it helps to review the OSI model and what a network switch actually does. This sets the foundation for choosing the right device in the discussion of layer 2 switch vs layer 3 switch.

OSI Model: The 7 Layers

The Open Systems Interconnection (OSI) model is a conceptual framework for network communication introduced in 1984. Even though today’s internet commonly references the simpler TCP/IP model, OSI remains useful for describing architectures. It divides communication into seven layers, each with specific responsibilities:

1. Physical (Layer 1): Hardware media such as copper and fiber; transmission of bits.
2. Data Link (Layer 2): Frames, error detection/correction, frame format and rules.
3. Network (Layer 3): Packet delivery, addressing and routing across networks.
4. Transport (Layer 4): End-to-end communication, reliability, flow control, error handling.
5. Session (Layer 5): Establishes, manages and terminates sessions between applications.
6. Presentation (Layer 6): Data format translation, encryption/decryption.
7. Application (Layer 7): User-facing services such as email and file transfer.

What Is a Network Switch?

A network switch connects devices (computers, printers, APs) and lets them exchange packets. Switches can be hardware or virtual software devices.

Switches traditionally operate at the OSI Data Link layer and forward packets within a LAN. When a frame arrives, the switch checks the destination MAC address to decide the egress port. By learning a MAC address table, a switch forwards traffic point-to-point instead of broadcasting.

Switches provide various physical interfaces (Ethernet/Fast Ethernet/fiber). Their operating software manages interfaces and stores the MAC addresses learned on each port to make forwarding decisions.

Layer 2 Switch (Data Link Switching)

Historically, bridges were used to connect network segments, maintaining a CAM/filtering table. Switches replaced bridges by providing faster, more efficient forwarding. A Layer 2 switch maintains a MAC address table to forward frames precisely and avoid unnecessary broadcasts. Each port is its own collision domain, improving performance.

Layer 2 switches look at the destination MAC header to forward frames directly between devices. They also learn MAC addresses automatically when devices first connect, improving manageability.

How a Layer 2 Switch Works

When a frame arrives, the switch reads the source and destination MAC addresses. If the destination exists in the MAC table, it forwards the frame to that port; otherwise, it floods the frame to all ports except the incoming one.

Layer 2 Communication Process (ARP Example)

Assume hosts A and B connect to the same Layer 2 switch.

1. Host A wants to reach host B.
   • A knows B’s IP address but not B’s MAC.
2. Host A sends an ARP request.
   • The broadcast ARP asks which MAC corresponds to B’s IP.
3. The switch floods the ARP request to all hosts in the same Layer 2 broadcast domain.
4. Host B replies with an ARP response containing its MAC.
5. Communication is established.
   • A sends frames to the switch using B’s MAC.
   • Because the switch has learned B’s location, it forwards directly to B instead of broadcasting.

If A and B are in different broadcast domains (e.g., different VLANs), a router or a Layer 3 switch must route traffic between VLANs.

Layer 2 Switching Functions

1. Address Learning: The switch associates source MAC addresses with ingress ports to build the MAC table.
2. Frame Forwarding: The switch forwards only to the destination port found in the MAC table, avoiding broadcast storms.
3. Loop Avoidance: To prevent loops across redundant links, protocols such as STP (Spanning Tree Protocol) detect and block redundant paths and recalculate the topology when links change.

Loop Avoidance with STP

If multiple switches are interconnected with redundant links, loops may cause frames to circulate indefinitely, congesting the network. STP mitigates this:

• Elect a root bridge (lowest bridge priority; MAC address as tie-breaker).
• Each switch selects a root port (shortest path to root).
• Non-root redundant ports are blocked to remove loops.
• BPDU exchanges monitor topology; STP recalculates on changes.

Design balances redundancy (for availability) and loop prevention.

Layer 2 Switch: Advantages and Disadvantages

Advantages

1. Forwards based on unique MAC addresses for efficient transmission.
2. Minimal setup/management complexity.
3. Low cost and quick to deploy.
4. Basic traffic accounting.
5. Low latency and a baseline level of segmentation/security.

Disadvantages

1. Limited intelligence beyond MAC-based forwarding; no IP-based filtering/routing.
2. Cannot route or switch based on IP addresses.
3. Cannot guarantee bandwidth for VoIP users and other QoS-sensitive apps.

Layer 3 Switch (Routing at the Network Layer)

A Layer 3 switch can route using IP addressing, not just MAC. It reads both IP and MAC headers to forward traffic, and like Layer 2 devices, it can create and manage VLANs to segment broadcast domains. Thanks to Layer 3 intelligence, it often provides higher throughput in complex topologies while still learning addresses and avoiding loops like a Layer 2 switch.

How a Layer 3 Switch Works

Upon receiving a packet, the switch examines the source/destination IP addresses and consults the IP routing table. If a matching route exists, it forwards out the corresponding interface; otherwise, it uses routing protocols (e.g., RIP, OSPF) to determine the path.

Layer 3 Communication Process

1. Intra-VLAN communication (Layer 2 forwarding)
   • When two hosts are in the same VLAN, the Layer 3 switch forwards frames like a Layer 2 switch using the MAC table.
2. Inter-VLAN communication (Layer 3 forwarding)
   • Frames destined for another subnet are sent to the default gateway (the Layer 3 switch).
   • The switch decapsulates the IP packet, looks up the routing table, re-encapsulates, and sends via the outbound interface; the destination MAC determines the final egress port.
3. SVI (Switch Virtual Interface)
   • An SVI is a virtual interface bound to a VLAN, allowing the switch to send/receive IP packets in that VLAN using an IP address.
4. Destination MAC Selection
   • Broadcast/multicast frames are flooded to all physical ports in the VLAN; unicast frames are forwarded according to the MAC table.

Layer 3 Switch: Advantages and Disadvantages

Advantages

1. Provides guaranteed QoS options for critical applications.
2. Stronger security via advanced policies and features.
3. Splits one LAN into multiple VLANs for flexible segmentation.
4. Enables routing between different subnets.
5. IP-based forwarding and routing intelligence.
6. Uses logical addressing to choose optimal paths.

Disadvantages

1. Higher cost than Layer 2 switches.
2. Requires more configuration and ongoing management.
3. Needs additional processing memory and power to support advanced features.

When Should You Use a Layer 3 Switch?

• Multiple VLANs: Needed for inter-VLAN routing so devices in different subnets can communicate.
• Large-scale networks: Tens, hundreds, or thousands of users; better traffic control and routing strategies (enterprise/campus/data center).
• Security policies: Access control between segments, deep inspection; often combined with firewalls.
• Simplified management: Fewer devices and clearer policies can reduce operational overhead.
• QoS requirements: Fine-grained service quality for critical apps.
• Inter-subnet connectivity: Routing between offices or remote sites.

Layer 2 Switch vs Layer 3 Switch (Side-by-Side Comparison)

Below is a translation of the original comparison points, preserved without reduction and aligned to a side-by-side view for clarity:

For differences in switch management capabilities, see our Managed Switch vs Unmanaged Switch guide

Summary

This guide explained both switch types in depth in the context of layer 2 switch vs layer 3 switch.

• Layer 2 switch (data link): forwards using MAC addresses and a learned MAC table, working within a single broadcast domain.
• Layer 3 switch (network/routing): reads both MAC and IP, maintains an IP routing table, and forwards based on routing decisions.

Essential differences: operating layer (frames vs packets), address type (MAC vs IP), forwarding decision basis, and communication scope (single broadcast domain vs inter-domain routing).

Typical scenarios

• Small networks (home/small office): Layer 2 is usually sufficient and cost-effective.
• Large networks (enterprise/campus): Layer 3 is common for complex requirements and better segmentation/management.
• Data centers: Often use higher-end/multilayer/core switches operating across multiple layers.

FAQ

At the network hierarchy level, also compare Aggregation Switch vs Core Switch