Transparent interconnection of Ethernet fabric switches

One embodiment of the present invention provides a switch. The switch includes a fabric switch module and a border module. The fabric switch module maintains a membership in a first fabric switch. The fabric switch includes a plurality of switches and operates as a single logical switch. The border module determines that the egress switch identifier in a first encapsulation header of a first packet is associated with a switch outside of the fabric switch. The first packet is forwardable in the first fabric switch based on the first encapsulation header. In response to the determination, the border module changes the ingress switch identifier in the first encapsulation header of the first packet to a first virtual switch identifier associated with a first virtual switch. This first virtual switch externally represents the first fabric switch.