A mechanism for allowing a single physical IB node to virtualize a plurality of host channel adapters is provided. This includes providing the appearance of both a router and multiple virtual HCA's residing behind that router, to the external REAL subnet components. Each virtual host channel adapter will have unique access control levels. One or more InfiniBand subnets are virtualized in such a way that nodes residing both within the virtual subnets and in separate physical subnets are completely unaware of the virtualization. This virtualization of InfiniBand subnets significantly increases the horizontal scaling capabilities of a single InfiniBand physical component, while at the same time provides “native” network throughput for all the virtual hosts.