IPv6 Tunnelling is the act of tunnelling IPv6 packets from an IPv6 network through an IPv4 network to another IPv6 network. This is different than Network Address Translation (NAT) because, once the packet reaches its final destination, the true originating address of the sender will still be readable. The IPv6 packets are encapsulated within packets with IPv4 headers, which carry their IPv6 payload through the IPv4 network.

The key to IPv6 tunnelling is the ability of the two devices, whether they are a host or a network device, to be dual stack compatible in order to work with both IPv4 and IPv6 at the same time. In the process, the entry node of the tunnel portion of the path will create an encapsulating IPv4 header and transmit the encapsulated packet. The exit node at the end of the tunnel receives the encapsulated packet. The IPv4 header is removed, the IPv6 header is updated, and the IPv6 packet is processed.

There are two types of tunnels in IPv6:

Automatic tunnels: Automatic tunnels are configured by using IPv4 address information embedded in an IPv6 address – the IPv6 address of the destination host includes information about which IPv4 address the packet should be tunnelled to.

Configured tunnels: Configured tunnels must be configured manually. These tunnels are used when using IPv6 addresses that do not have any embedded IPv4 information. The IPv6 and IPv4 addresses of the endpoints of the tunnel must be specified.