Methods and network devices are disclosed for internet protocol (IP) based encapsulation in bit indexed explicit replication (BIER) forwarding. In one embodiment, a method includes receiving a multicast message comprising an inner IP header, an intervening header, and an outer IP header. The embodiment further includes accessing a message bit array stored in the intervening header, retrieving an IP address from an entry in a bit indexed forwarding table, replacing an IP destination address in the outer IP header of a copy of the multicast message with the retrieved IP address, and sending the copy of the multicast message toward a second node in the network, where the retrieved IP address is assigned to the second node. An embodiment of a network device includes a processor operably coupled to a plurality of storage locations and to one or more network interfaces and adapted to perform steps of the method.