Using transactions to compute and propagate network forwarding state

For a controller for managing a network comprising several managed forwarding elements that forward data in the network, a method for configuring a managed forwarding element is described. The method generates a first set of flow entries for defining forwarding behaviors of the managed forwarding element based on a current network policy for a logical network implemented in the several managed forwarding elements. The method sends the first set of flow entries to the managed forwarding element in order for the managed forwarding element to forward data that the managed forwarding element directly receives from an end machine based on the current network policy. The method generates a second set of flow entries for modifying forwarding behaviors of the managed forwarding element based on a new network policy for the logical network. The method sends the second set of flow entries to the managed forwarding element in order for the managed forwarding element to forward the data based on the new network policy.