The present invention relates to the communications field, and discloses a capability indication method, a route setup method, a mobile terminal, and a network device, so as to save electricity of a mobile terminal in a D2D mesh network. A specific solution is as follows: A network device sends first indication information to a mobile terminal, where the first indication information is used by the network device to indicate to the mobile terminal that a communications network in which the network device is located supports communication between mobile terminals having a multi-hop capability, and the mobile terminal having the multi-hop capability is a mobile terminal having a capability of directly communicating with one or more mobile terminals. Embodiments of the present invention are applied to D2D communication.