Systems and techniques for forwarding a data packet between network components in a virtualized network system are presented. Virtual machines in each virtual network in the virtualized network system are mapped to a unique routing table. Internet protocol (IP) addresses of virtual machines in a virtual network can overlap with IP addresses of virtual machines in another virtual network. A data packet is associated with a particular virtual network based on a tag stored in the data packet. As such, the data packet is forwarded based on a particular routing table associated with the particular virtual network. Additionally, routing domain information can be encoded into an outer source IP field of the data packet at the beginning of an IP tunnel. Furthermore, the routing domain information in the outer source IP field can be used to forward the data packet at the end of the IP tunnel.