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Basic MPLS Configuration on Cisco IOS: Step-by-Step Guide

Overview of the MPLS Configuration Process

MPLS is almost never deployed alone. In this video, we build a complete ISP network topology with:

  • 3 BGP autonomous systems: Two customer sites (AS1 and AS2) and one ISP network (AS100)
  • Routers: CE1/CE2 at customer sites, PE1/PE2 as provider edge routers, and P routers in the core
  • Protocols used: eBGP, OSPF, iBGP, and finally MPLS with LDP

Step-by-Step Configuration

1. Configure eBGP Peerings between CE and PE

  • CE1 (AS1) peers with PE1 (AS100) over the 10.10.10.0/24 link
  • CE2 (AS2) peers with PE2 (AS100) over a similar link
  • Purpose: Customer networks are advertised to the PE routers via eBGP
  • Note: BGP configuration details are covered in the video’s BGP series (linked in description). For more on how BGP integrates with MPLS, see How BGP Is Used in the MPLS Core: Edge Routing Explained.

2. Configure OSPF Underlay on All P and PE Routers

  • Advertise all loopback interfaces and physical links (except those facing CEs)
  • Enable passive interface on customer-facing ports to prevent OSPF from leaking into the CE network
  • Why this matters: LDP adjacencies form between loopback IPs, so they must be reachable via OSPF. For a deeper look at LDP’s role, visit LDP in MPLS: Label Distribution Protocol Simply Explained.

3. Configure iBGP Full Mesh between All PE Routers

  • Use loopback IPs for iBGP peering (e.g., PE1 and PE2 peer via 4.4.4.4 and 5.5.5.5)
  • Required commands: neighbor ... update-source loopback0 and neighbor ... next-hop-self
  • P routers do not participate in iBGP; they only forward iBGP messages via OSPF

4. Enable MPLS (LDP) on All Core Interfaces

  • On each P and PE router, issue the mpls ip command on all interfaces that belong to the MPLS core
  • Do not enable MPLS on customer-facing interfaces
  • Result: LDP adjacencies form automatically, labels are exchanged, and the topology converges. If you need a refresher on MPLS basics, check out MPLS Explained: What Is Multi-Protocol Label Switching? (Simple Guide).

Verification and Under-the-Hood Analysis

  • Successful ping from CE1 to CE2 loopback confirms end-to-end connectivity
  • P router IP routing table does not contain the customer’s source/destination IPs, only LDP labels are used in the core. For clarity on device roles, see MPLS Labels, Device Roles & LDP Protocol Explained Simply.
  • PE1 routing table: The destination customer network is reachable via the iBGP next hop (PE2, 4.4.4.4)
  • LFIB (Label Forwarding Information Base): Shows label 17 pushed for next hop PE2, with exit interface Gi0/2 and next-hop IP 10.10.20.2. Learn about the mechanics behind this in MPLS Label Operations: Pushing, Swapping, and Popping Explained.
  • Penultimate Hop Popping (PHP): The last P router pops the label before forwarding to PE2, which then uses standard IP routing to reach CE2

Key Takeaways

  • MPLS configuration is minimal, the real work is the routing underlay (IGP + BGP)
  • The IGP must make all loopback IPs reachable before MPLS works
  • BGP is used only between PEs to exchange customer routes; P routers are BGP-free
  • MPLS hides customer IPs inside the core (label switching) and uses PHP to reduce overhead at the egress PE

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