Virtual private LAN service (VPLS) enables one to connect local area networks (LANs) over the Internet, so that they appear to subscribers like a single Ethernet LAN. A VPLS uses MPLS to create the appearance of a virtual private network (VPN) at each subscriber location.

Virtual Private Networks (VPNs) have evolved conciderably. Today, VPLS based VPNs enable service providers to offer enterprise customers the operational cost benefits of Ethernet with the predictible Quality of Service characteristics of MPLS.

VPLS stands for Virtual Private Lan Service. Like MPLS based IP VPNs, VPLS is a multipoint service. But unlike IP VPN, it can transport non IP-traffic.

VPLS is a Layer 2 multipoint VPN that allows multiple sites to be connected in a single bridged domain over a provider-managed IP MPLS network.

All customer sites in a VPLS instance appear to be on the same Local Area Network (LAN), regardless of their actual locations.

VPLS uses an Ethernet interface with the customer. This simplefies the WAN / LAN boundary and enables rapid and flexible service provisioning.

A VPLS capable network consists of three main components:
- Customer Edges (CE)
- Provider Edges (PE)
- a core MPLS network

The CE device is a router or switch, located at the customer’s premises. The PE device is where all the VPN intelligence resides. It is also where the VPLS originates and terminates, and where all the nessesary tunnels are set up to connect to all the other Provider Edges.

The IP MPLS core network interconnects the PEs. It does not really participate in the VPN functionality; traffic is simply switched based on the MPLS labels.

The basis of a multipoint VPN service such as VPLS is the full mesh of MPLS tunnels that are set up between all the PEs participating in the VPN service. For every VPLS instance, this full mesh of inner tunnels (called pseudo wires), is created between all the PEs that participate in the VPLS instance.