Partial reassembly and fragmentation for decapsulation

In one embodiment, a decapsulating network device receives a plurality of encapsulated packet fragments of an original packet, and decapsulates them into respective decapsulated packet fragments. The decapsulating network device caches an inner header of the original packet from one of the decapsulated packet fragments, and in response to caching the inner header, and for each particular decapsulated packet fragment as it is received and decapsulated: prepends the inner header and fragmentation information to the particular decapsulated packet fragment; and forwards the particular decapsulated packet fragment with the prepended inner header and fragmentation information from the decapsulating network device toward a destination of the original packet.