A data forwarding method and a controller are disclosed. The method includes: obtaining, by a controller, first identification information of a terminal, where the first identification information includes terminal capability information, service type information, and quality of service QoS information of the terminal (501); determining N functional modules in L network nodes from M network nodes according to the first identification information, where the N functional modules are configured to process a data stream that corresponds to a service of the terminal (502); and configuring, for the L network nodes, corresponding forwarding entries for forwarding the data stream, where the forwarding entries are used to enable the L network nodes to process the data stream by using the N functional modules (503).