An apparatus for detecting a loop in a domain comprising a plurality of overlay tunnel fabrics is provided. The apparatus can include an indicator logic block that can insert a predetermined value, which can be unique for the apparatus in the domain, into an egress tunnel header of a packet of a data flow. The header's destination address can correspond to a remote apparatus of an overlay tunnel fabric that includes the apparatus. Tunnel encapsulation can be initiated and terminated within the corresponding overlay tunnel fabric. The indicator logic block can determine, for a respective packet of the data flow from a remote overlay tunnel fabric of the domain, whether the predetermined value is present in an ingress tunnel header. Upon identifying the predetermining value in the ingress tunnel header, a loop logic block of the apparatus can determine that a loop is present in the domain.