A system and method are provided for forwarding packets through a fully meshed communication network when the destination MAC address may not be known. Each network element maintains a mapping of MAC addresses and IP addresses, each MAC address having an associated IP address which indicates to where packets are to be forwarded. If a network element receives a packet but has not yet associated an IP address with the destination MAC address of the packet, then the network element forwards the packet along a tree. If a network element receives a packet and has associated an IP address with the destination MAC address, in other words has learned of the IP address for the MAC address, the network element sends the packet directly to the IP address unless a direct link to the IP address is not available. If a direct link is not available, the network element forwards the packet along the tree. A network element receiving a packet from an attachment circuit encapsulates its own IP address in the message, permitting other network elements to learn of the IP address associated with the source MAC address. The invention provides reliable forwarding of packets to both known and unknown destination MAC addresses, while taking advantage of shortest paths provided by a fully meshed network.