VLANs are used to segment switched networks. Layer 2 switches, such as the Catalyst 2960 Series, can be configured by a network professional with over 4,000 VLANs. However, Layer 2 switches have very limited IPv4 and IPv6 functionality and cannot perform the routing function of routers. While Layer 2 switches are gaining more IP functionality, such as the ability to perform static routing, these switches do not support dynamic routing. With the large number of VLANs possible on these switches, static routing is insufficient.
A VLAN is a broadcast domain, so computers on separate VLANs are unable to communicate without the intervention of a routing device. Any device that supports Layer 3 routing, such as a router or a multilayer switch, can be used to perform the necessary routing functionality. Regardless of the device used, the process of forwarding network traffic from one VLAN to another VLAN using routing is known as inter-VLAN routing.