When a line module receives IP frames destined for a tunnel, the module forwards the frames to a tunnel-service module. Tunnel-service modules include SMs and modules that support the use of shared tunnel-server ports.
The tunnel-service module encapsulates the frames and forwards them to the tunnel through an interface determined by a route lookup of an IP frame. The source and destination addresses in the IP frame are the source and destination addresses of the tunnel.
Similarly, when a line module receives traffic from a tunnel, the module forwards the traffic to the tunnel-service module for deencapsulation. After deencapsulation, the tunnel-service module forwards the resulting IP frames to an interface determined by a route lookup.
When you have configured a tunnel interface, treat it in the same way as any IP interface on the router. For example, you can configure static IP routes or enable routing protocols on the tunnel interface. The IP configurations you apply to the tunnels control how traffic travels through the network.