A packet processing method and a network device, where the method includes: receiving, by a network device, a packet, where the packet includes classification information, and the classification information includes M fields; determining, by the network device, K fields in the M fields according to indication information stored by the network device; determining, by the network device, a target classification rule based on a first classification rule set stored by the network device and the K fields, and processing the packet according to the target classification rule.