When a packet is forwarded from a CE to a PE, a bottom label is attached to the packet by the PE that is associated with the final destination. This label is obtained from the egress PE as part of the route discovery conducted by IBGP. Then, the top label which is obtained by the LSP connecting to the egress PE is added to the packet. The packet is then forwarded through the MPLS domain and is switched using the top label. At the penultimate device in the LSP, the top label is removed and the packet is forwarded to the egress PE. The egress PE uses the inner label to identify the CE to which the packet must be forwarded. The egress PE removes the inner label and forwards the packet to the correct CE.
The diagram below describes how a packet is forwarded through a BGP or MPLS VPN.
