System and method embodiments are disclosed here to resolve Internet Protocol (IP) address overlap of Virtual eXtensible Local Area Network (VXLAN) endpoints in packets forwarded between the VXLAN and an external or public network. An embodiment method includes assigning different port number ranges to different virtual private networks of the VXLAN, mapping private IP addresses for endpoints at the virtual private networks to corresponding public IP addresses known to a public network, and mapping local ports of the endpoints to corresponding port numbers from the port number ranges assigned to the virtual private networks, wherein each of the endpoints at the virtual private networks is assigned to a unique combination of public IP address and port number. The mapping can be done at a VXLAN gateway or at the endpoints on physical servers of the virtual private networks.