VRF is its full form is about Labeling (via MPLS) your traffic at layer 3 ( similar concept to Vlans at layer 2).  In VRF , traffic is isolated from source to destination through the MPLS cloud which uses MPBGP in the service provider Cloud environment.RD and RTs (Route Distinguishers and Route Targets) are incorporated for overlapping Route segregation and using Common services.

VRF-lite is normally VRF without MPLS and MPBGP (We can call VRF Lite a subset of VRF). VRF lite can be called a way of virtualizing network elements and various Security zones inside Data Center or Office LAN environment.This can be used if enterprise has networks of overlapping IP addresses or some segments are required to traverse through network Firewall. VRF-lite configuration doesn’t need the route-target and can be done by static or dynamic routing under its vrf instance.


Below table compares both the VRF and VRF Lite and shares their differences :

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