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PPPoE Client-Server setup and configuration


This is an example of configuring PPPoE in a back-to-back scenario. The objective here is to simulate a PPPoE server (typically found on the ISP end)


In this example, we're using 2 routers connected back-to-back on their Fa0/0 ports. Here're the parameters being simulated

1. Authentication using Chap/Pap (Username: cisco, password: sisco)

2. Client being authenticated by the server (one way authentication)

3. IP address being negotiated using IPCP

Here's the relevant configuration needed on the client router

interface FastEthernet0/0

no ip address

no ip redirects

no ip unreachables

no ip proxy-arp

ip virtual-reassembly

ip tcp adjust-mss 1452

duplex auto

speed auto

pppoe enable

pppoe-client dial-pool-number 1


interface Dialer1

ip address negotiated

encapsulation ppp

dialer pool 1

dialer-group 1

no cdp enable

ppp authentication pap chap callin

ppp pap sent-username cisco password sisco

ppp chap hostname cisco

ppp chap password sisco


ip route Dialer1

Here's the relevant configuration needed on the Server

username cisco password sisco


bba-group pppoe global

virtual-template 1


interface FastEthernet0/0

ip address

ip rip advertise 4

load-interval 30

duplex auto

speed auto

pppoe enable group global


interface Virtual-Template1

mtu 1492

ip unnumbered FastEthernet0/0

peer default ip address pool pppoepool

ppp authentication pap chap


ip local pool pppoepool


Here's how the flow will be

1. Client negotiates PPPoE using PADo, PADi and PADr with the server, both client and server move into PPP-->LCP phase

2. Client/Server negotiate authentication, other parameters

3. Server asks the client for a username/password (using pap, as pap is configured before chap)

4. Client sends out a username/password configured in it's dialer

5. Server authenticates this username/password against its global username/password list (alternatively a AAA/Radius server)

6. Client and Server both move on to IPCP phase

7. Client sends an ip address of (asking for an ip address from the Server)

8. Server hands out an IP address from its pool (in this case pppoepool)

9. Client/Server finish IPCP phase and the link comes up

At this time, the link should be up and able to pass traffic


Hi Ronit,

A very good article. Thanks for contributing.

Community Member

WTB some debug commands for the 1 - 9 stages

but it's a nice article, even old, still should work, gonna try it for sure, cause i need to play with pppoe a bit .

Cisco Employee


What is best pratice for configuring ip address in server interface, physical interface or virtual-template.

Is it documented anywhere?



Thanks for this grean info.

Community Member

Thanks, worked fine, I did add NAT and DHCP

be sure to use the "IP NAT OUTSIDE" on the dialer 1 interface, and overload statement on the NAT command




Hello darrinmcland, where do you apply the IP NAT OUTSIDE on the fast Ethernet interface or dialer interface? I just a bit confuse on to where to apply NAT.

Community Member

the outside interface is dialer.

so the outside statements goes there, 

the accesslists also go here on the dialer.


dialer is your "wan".


Isn't that supposed to be ip mtu 1492 instead of simply mtu?




Amazing, I'm going to simulate it hopefully soon if I have some free time.

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