The size of packets that can travel through a GRE tunnel is limited by the lowest MTU of any router along the route through the tunnel. When dynamic MTU discovery is enabled, the tunnel maintains an MTU limit.

When a large packet is sent from the host with the DF bit on, and a router in the tunnel path has an MTU that is smaller than the size of the packet, since the DF bit is set, the router sends an ICMP unreachable message back in the originator (in this case, the GRE router). The GRE router then updates the tunnel’s MTU limit accordingly. When a packet larger than the MTU arrives at the tunnel, if the packet is marked do not fragment, the tunnel’s source interface sends the packet back to the host requesting the host to fragment the packet. When dynamic MTU discovery is disabled, the tunnel’s source interface marks each packet as may be fragmented, even if the packet’s original setting is do not fragment. For more information on MTU and fragmentation, refer to Fragmentation.