diff --git a/example/ipsec/odp_ipsec.c b/example/ipsec/odp_ipsec.c
index 99ccd6b..ed56e14 100644
--- a/example/ipsec/odp_ipsec.c
+++ b/example/ipsec/odp_ipsec.c
@@ -135,13 +135,20 @@ typedef struct {
 	uint8_t  ip_ttl;         /**< Saved IP TTL value */
 	int      hdr_len;        /**< Length of IPsec headers */
 	int      trl_len;        /**< Length of IPsec trailers */
+	uint16_t tun_hdr_offset; /**< Offset of tunnel header from
+				      buffer start */
 	uint16_t ah_offset;      /**< Offset of AH header from buffer start */
 	uint16_t esp_offset;     /**< Offset of ESP header from buffer start */
 
+	/* Input only */
+	uint32_t src_ip;         /**< SA source IP address */
+	uint32_t dst_ip;         /**< SA dest IP address */
+
 	/* Output only */
 	odp_crypto_op_params_t params;  /**< Parameters for crypto call */
 	uint32_t *ah_seq;               /**< AH sequence number location */
 	uint32_t *esp_seq;              /**< ESP sequence number location */
+	uint16_t *tun_hdr_id;           /**< Tunnel header ID > */
 } ipsec_ctx_t;
 
 /**
@@ -357,6 +364,7 @@ void ipsec_init_pre(void)
 	/* Initialize our data bases */
 	init_sp_db();
 	init_sa_db();
+	init_tun_db();
 	init_ipsec_cache();
 }
 
@@ -376,19 +384,27 @@ void ipsec_init_post(crypto_api_mode_e api_mode)
 	for (entry = sp_db->list; NULL != entry; entry = entry->next) {
 		sa_db_entry_t *cipher_sa = NULL;
 		sa_db_entry_t *auth_sa = NULL;
+		tun_db_entry_t *tun = NULL;
 
-		if (entry->esp)
+		if (entry->esp) {
 			cipher_sa = find_sa_db_entry(&entry->src_subnet,
 						     &entry->dst_subnet,
 						     1);
-		if (entry->ah)
+			tun = find_tun_db_entry(cipher_sa->src_ip,
+						cipher_sa->dst_ip);
+		}
+		if (entry->ah) {
 			auth_sa = find_sa_db_entry(&entry->src_subnet,
 						   &entry->dst_subnet,
 						   0);
+			tun = find_tun_db_entry(auth_sa->src_ip,
+						auth_sa->dst_ip);
+		}
 
 		if (cipher_sa || auth_sa) {
 			if (create_ipsec_cache_entry(cipher_sa,
 						     auth_sa,
+						     tun,
 						     api_mode,
 						     entry->input,
 						     completionq,
@@ -670,6 +686,8 @@ pkt_disposition_e do_ipsec_in_classify(odp_packet_t pkt,
 	ctx->ipsec.esp_offset = esp ? ((uint8_t *)esp) - buf : 0;
 	ctx->ipsec.hdr_len = hdr_len;
 	ctx->ipsec.trl_len = 0;
+	ctx->ipsec.src_ip = entry->src_ip;
+	ctx->ipsec.dst_ip = entry->dst_ip;
 
 	/*If authenticating, zero the mutable fields build the request */
 	if (ah) {
@@ -750,6 +768,24 @@ pkt_disposition_e do_ipsec_in_finish(odp_packet_t pkt,
 		trl_len += esp_t->pad_len + sizeof(*esp_t);
 	}
 
+	/* We have a tunneled IPv4 packet */
+	if (ip->proto == ODPH_IPV4) {
+		odp_packet_pull_head(pkt, sizeof(*ip) + hdr_len);
+		odp_packet_pull_tail(pkt, trl_len);
+		odph_ethhdr_t *eth;
+
+		eth = (odph_ethhdr_t *)odp_packet_l2_ptr(pkt, NULL);
+		eth->type = ODPH_ETHTYPE_IPV4;
+		ip = (odph_ipv4hdr_t *)odp_packet_l3_ptr(pkt, NULL);
+
+		/* Check inbound policy */
+		if ((ip->src_addr != ctx->ipsec.src_ip ||
+		     ip->dst_addr != ctx->ipsec.dst_ip))
+			return PKT_DROP;
+
+		return PKT_CONTINUE;
+	}
+
 	/* Finalize the IPv4 header */
 	ipv4_adjust_len(ip, -(hdr_len + trl_len));
 	ip->ttl = ctx->ipsec.ip_ttl;
@@ -821,9 +857,13 @@ pkt_disposition_e do_ipsec_out_classify(odp_packet_t pkt,
 	params.pkt = pkt;
 	params.out_pkt = entry->in_place ? pkt : ODP_PACKET_INVALID;
 
+	if (entry->mode == IPSEC_SA_MODE_TUNNEL) {
+		hdr_len += sizeof(odph_ipv4hdr_t);
+		ip_data = (uint8_t *)ip;
+	}
 	/* Compute ah and esp, determine length of headers, move the data */
 	if (entry->ah.alg) {
-		ah = (odph_ahhdr_t *)(ip_data);
+		ah = (odph_ahhdr_t *)(ip_data + hdr_len);
 		hdr_len += sizeof(odph_ahhdr_t);
 		hdr_len += entry->ah.icv_len;
 	}
@@ -835,21 +875,39 @@ pkt_disposition_e do_ipsec_out_classify(odp_packet_t pkt,
 	memmove(ip_data + hdr_len, ip_data, ip_data_len);
 	ip_data += hdr_len;
 
+	/* update outer header in tunnel mode */
+	if (entry->mode == IPSEC_SA_MODE_TUNNEL) {
+		/* tunnel addresses */
+		ip->src_addr = odp_cpu_to_be_32(entry->tun_src_ip);
+		ip->dst_addr = odp_cpu_to_be_32(entry->tun_dst_ip);
+	}
+
 	/* For cipher, compute encrypt length, build headers and request */
 	if (esp) {
 		uint32_t encrypt_len;
 		odph_esptrl_t *esp_t;
 
-		encrypt_len = ESP_ENCODE_LEN(ip_data_len + sizeof(*esp_t),
-					     entry->esp.block_len);
-		trl_len = encrypt_len - ip_data_len;
+		if (entry->mode == IPSEC_SA_MODE_TUNNEL) {
+			encrypt_len = ESP_ENCODE_LEN(ip->tot_len +
+						     sizeof(*esp_t),
+						     entry->esp.block_len);
+			trl_len = encrypt_len - ip->tot_len;
+		} else {
+			encrypt_len = ESP_ENCODE_LEN(ip_data_len +
+						     sizeof(*esp_t),
+						     entry->esp.block_len);
+			trl_len = encrypt_len - ip_data_len;
+		}
 
 		esp->spi = odp_cpu_to_be_32(entry->esp.spi);
 		memcpy(esp + 1, entry->state.iv, entry->esp.iv_len);
 
 		esp_t = (odph_esptrl_t *)(ip_data + encrypt_len) - 1;
 		esp_t->pad_len     = trl_len - sizeof(*esp_t);
-		esp_t->next_header = ip->proto;
+		if (entry->mode == IPSEC_SA_MODE_TUNNEL)
+			esp_t->next_header = ODPH_IPV4;
+		else
+			esp_t->next_header = ip->proto;
 		ip->proto = ODPH_IPPROTO_ESP;
 
 		params.cipher_range.offset = ip_data - buf;
@@ -861,7 +919,10 @@ pkt_disposition_e do_ipsec_out_classify(odp_packet_t pkt,
 		memset(ah, 0, sizeof(*ah) + entry->ah.icv_len);
 		ah->spi = odp_cpu_to_be_32(entry->ah.spi);
 		ah->ah_len = 1 + (entry->ah.icv_len / 4);
-		ah->next_header = ip->proto;
+		if (entry->mode == IPSEC_SA_MODE_TUNNEL && !esp)
+			ah->next_header = ODPH_IPV4;
+		else
+			ah->next_header = ip->proto;
 		ip->proto = ODPH_IPPROTO_AH;
 
 		ip->chksum = 0;
@@ -884,8 +945,11 @@ pkt_disposition_e do_ipsec_out_classify(odp_packet_t pkt,
 	ctx->ipsec.trl_len = trl_len;
 	ctx->ipsec.ah_offset = ah ? ((uint8_t *)ah) - buf : 0;
 	ctx->ipsec.esp_offset = esp ? ((uint8_t *)esp) - buf : 0;
+	ctx->ipsec.tun_hdr_offset = (entry->mode == IPSEC_SA_MODE_TUNNEL) ?
+				       ((uint8_t *)ip - buf) : 0;
 	ctx->ipsec.ah_seq = &entry->state.ah_seq;
 	ctx->ipsec.esp_seq = &entry->state.esp_seq;
+	ctx->ipsec.tun_hdr_id = &entry->state.tun_hdr_id;
 	memcpy(&ctx->ipsec.params, &params, sizeof(params));
 
 	*skip = FALSE;
@@ -924,6 +988,21 @@ pkt_disposition_e do_ipsec_out_seq(odp_packet_t pkt,
 		esp = (odph_esphdr_t *)(ctx->ipsec.esp_offset + buf);
 		esp->seq_no = odp_cpu_to_be_32((*ctx->ipsec.esp_seq)++);
 	}
+	if (ctx->ipsec.tun_hdr_offset) {
+		odph_ipv4hdr_t *ip;
+		int ret;
+
+		ip = (odph_ipv4hdr_t *)(ctx->ipsec.tun_hdr_offset + buf);
+		ip->id = odp_cpu_to_be_16((*ctx->ipsec.tun_hdr_id)++);
+		if (!ip->id) {
+			/* re-init tunnel hdr id */
+			ret = odp_random_data((uint8_t *)ctx->ipsec.tun_hdr_id,
+					      sizeof(*ctx->ipsec.tun_hdr_id),
+					      1);
+			if (ret != sizeof(*ctx->ipsec.tun_hdr_id))
+				abort();
+		}
+	}
 
 	/* Issue crypto request */
 	if (odp_crypto_operation(&ctx->ipsec.params,
@@ -1315,8 +1394,9 @@ static void parse_args(int argc, char *argv[], appl_args_t *appl_args)
 		{"mode", required_argument, NULL, 'm'},		/* return 'm' */
 		{"route", required_argument, NULL, 'r'},	/* return 'r' */
 		{"policy", required_argument, NULL, 'p'},	/* return 'p' */
-		{"ah", required_argument, NULL, 'a'},	        /* return 'a' */
-		{"esp", required_argument, NULL, 'e'},	        /* return 'e' */
+		{"ah", required_argument, NULL, 'a'},		/* return 'a' */
+		{"esp", required_argument, NULL, 'e'},		/* return 'e' */
+		{"tunnel", required_argument, NULL, 't'},       /* return 't' */
 		{"stream", required_argument, NULL, 's'},	/* return 's' */
 		{"help", no_argument, NULL, 'h'},		/* return 'h' */
 		{NULL, 0, NULL, 0}
@@ -1327,7 +1407,7 @@ static void parse_args(int argc, char *argv[], appl_args_t *appl_args)
 	appl_args->mode = 0;  /* turn off async crypto API by default */
 
 	while (!rc) {
-		opt = getopt_long(argc, argv, "+c:i:m:h:r:p:a:e:s:",
+		opt = getopt_long(argc, argv, "+c:i:m:h:r:p:a:e:t:s:",
 				  longopts, &long_index);
 
 		if (-1 == opt)
@@ -1398,6 +1478,10 @@ static void parse_args(int argc, char *argv[], appl_args_t *appl_args)
 			rc = create_sa_db_entry(optarg, TRUE);
 			break;
 
+		case 't':
+			rc = create_tun_db_entry(optarg);
+			break;
+
 		case 's':
 			rc = create_stream_db_entry(optarg);
 			break;
@@ -1458,6 +1542,7 @@ static void print_info(char *progname, appl_args_t *appl_args)
 	dump_fwd_db();
 	dump_sp_db();
 	dump_sa_db();
+	dump_tun_db();
 	printf("\n\n");
 	fflush(NULL);
 }
diff --git a/example/ipsec/odp_ipsec_cache.c b/example/ipsec/odp_ipsec_cache.c
index 12b960d..6a8f3c9 100644
--- a/example/ipsec/odp_ipsec_cache.c
+++ b/example/ipsec/odp_ipsec_cache.c
@@ -38,6 +38,7 @@ void init_ipsec_cache(void)
 
 int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 			     sa_db_entry_t *auth_sa,
+			     tun_db_entry_t *tun,
 			     crypto_api_mode_e api_mode,
 			     odp_bool_t in,
 			     odp_queue_t completionq,
@@ -47,12 +48,18 @@ int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 	ipsec_cache_entry_t *entry;
 	enum odp_crypto_ses_create_err ses_create_rc;
 	odp_crypto_session_t session;
+	sa_mode_t mode = IPSEC_SA_MODE_TRANSPORT;
 
 	/* Verify we have a good entry */
 	entry = &ipsec_cache->array[ipsec_cache->index];
 	if (MAX_DB <= ipsec_cache->index)
 		return -1;
 
+	/* Verify SA mode match in case of cipher&auth */
+	if (cipher_sa && auth_sa &&
+	    (cipher_sa->mode != auth_sa->mode))
+		return -1;
+
 	/* Setup parameters and call crypto library to create session */
 	params.op = (in) ? ODP_CRYPTO_OP_DECODE : ODP_CRYPTO_OP_ENCODE;
 	params.auth_cipher_text = TRUE;
@@ -79,6 +86,7 @@ int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 		params.cipher_key.length  = cipher_sa->key.length;
 		params.iv.data = entry->state.iv;
 		params.iv.length = cipher_sa->iv_len;
+		mode = cipher_sa->mode;
 	} else {
 		params.cipher_alg = ODP_CIPHER_ALG_NULL;
 		params.iv.data = NULL;
@@ -90,6 +98,7 @@ int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 		params.auth_alg = auth_sa->alg.u.auth;
 		params.auth_key.data = auth_sa->key.data;
 		params.auth_key.length = auth_sa->key.length;
+		mode = auth_sa->mode;
 	} else {
 		params.auth_alg = ODP_AUTH_ALG_NULL;
 	}
@@ -128,6 +137,25 @@ int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 		memcpy(&entry->ah.key, &auth_sa->key, sizeof(ipsec_key_t));
 	}
 
+	if (tun) {
+		entry->tun_src_ip = tun->tun_src_ip;
+		entry->tun_dst_ip = tun->tun_dst_ip;
+		mode = IPSEC_SA_MODE_TUNNEL;
+
+		int ret;
+
+		if (!in) {
+			/* init tun hdr id */
+			ret = odp_random_data((uint8_t *)
+					      &entry->state.tun_hdr_id,
+					      sizeof(entry->state.tun_hdr_id),
+					      1);
+			if (ret != sizeof(entry->state.tun_hdr_id))
+				return -1;
+		}
+	}
+	entry->mode = mode;
+
 	/* Initialize state */
 	entry->state.esp_seq = 0;
 	entry->state.ah_seq = 0;
@@ -156,7 +184,9 @@ ipsec_cache_entry_t *find_ipsec_cache_entry_in(uint32_t src_ip,
 	/* Look for a hit */
 	for (; NULL != entry; entry = entry->next) {
 		if ((entry->src_ip != src_ip) || (entry->dst_ip != dst_ip))
-			continue;
+			if ((entry->tun_src_ip != src_ip) ||
+			    (entry->tun_dst_ip != dst_ip))
+				continue;
 		if (ah &&
 		    ((!entry->ah.alg) ||
 		     (entry->ah.spi != odp_be_to_cpu_32(ah->spi))))
diff --git a/example/ipsec/odp_ipsec_cache.h b/example/ipsec/odp_ipsec_cache.h
index 714cae8..5706007 100644
--- a/example/ipsec/odp_ipsec_cache.h
+++ b/example/ipsec/odp_ipsec_cache.h
@@ -34,6 +34,9 @@ typedef struct ipsec_cache_entry_s {
 	odp_bool_t                   in_place;    /**< Crypto API mode */
 	uint32_t                     src_ip;      /**< Source v4 address */
 	uint32_t                     dst_ip;      /**< Destination v4 address */
+	sa_mode_t		     mode;        /**< SA mode - transport/tun */
+	uint32_t                     tun_src_ip;  /**< Tunnel src IPv4 addr */
+	uint32_t                     tun_dst_ip;  /**< Tunnel dst IPv4 addr */
 	struct {
 		enum  odp_cipher_alg alg;         /**< Cipher algorithm */
 		uint32_t             spi;         /**< Cipher SPI */
@@ -54,6 +57,7 @@ typedef struct ipsec_cache_entry_s {
 		uint32_t      esp_seq;         /**< ESP TX sequence number */
 		uint32_t      ah_seq;          /**< AH TX sequence number */
 		uint8_t       iv[MAX_IV_LEN];  /**< ESP IV storage */
+		uint16be_t    tun_hdr_id;      /**< Tunnel header IP ID */
 	} state;
 } ipsec_cache_entry_t;
 
@@ -78,6 +82,7 @@ void init_ipsec_cache(void);
  *
  * @param cipher_sa   Cipher SA DB entry pointer
  * @param auth_sa     Auth SA DB entry pointer
+ * @param tun         Tunnel DB entry pointer
  * @param api_mode    Crypto API mode for testing
  * @param in          Direction (input versus output)
  * @param completionq Completion queue
@@ -87,6 +92,7 @@ void init_ipsec_cache(void);
  */
 int create_ipsec_cache_entry(sa_db_entry_t *cipher_sa,
 			     sa_db_entry_t *auth_sa,
+			     tun_db_entry_t *tun,
 			     crypto_api_mode_e api_mode,
 			     odp_bool_t in,
 			     odp_queue_t completionq,
diff --git a/example/ipsec/odp_ipsec_sa_db.c b/example/ipsec/odp_ipsec_sa_db.c
index 5837cb6..7967614 100644
--- a/example/ipsec/odp_ipsec_sa_db.c
+++ b/example/ipsec/odp_ipsec_sa_db.c
@@ -1,7 +1,7 @@
 /* Copyright (c) 2014, Linaro Limited
  * All rights reserved.
  *
- * SPDX-License-Identifier:     BSD-3-Clause
+ * SPDX-License-Identifier:	BSD-3-Clause
  */
 
 /* enable strtok */
@@ -19,6 +19,9 @@
 /** Global pointer to sa db */
 static sa_db_t *sa_db;
 
+/** Global pointer to tun db */
+static tun_db_t *tun_db;
+
 void init_sa_db(void)
 {
 	odp_shm_t shm;
@@ -37,6 +40,23 @@ void init_sa_db(void)
 	memset(sa_db, 0, sizeof(*sa_db));
 }
 
+void init_tun_db(void)
+{
+	odp_shm_t shm;
+
+	shm = odp_shm_reserve("shm_tun_db",
+			      sizeof(tun_db_t),
+			      ODP_CACHE_LINE_SIZE,
+			      0);
+	tun_db = odp_shm_addr(shm);
+
+	if (!tun_db) {
+		EXAMPLE_ERR("Error: shared mem alloc failed.\n");
+		exit(EXIT_FAILURE);
+	}
+	memset(tun_db, 0, sizeof(*tun_db));
+}
+
 int create_sa_db_entry(char *input, odp_bool_t cipher)
 {
 	int pos = 0;
@@ -81,7 +101,7 @@ int create_sa_db_entry(char *input, odp_bool_t cipher)
 					entry->alg.u.cipher =
 						ODP_CIPHER_ALG_3DES_CBC;
 					entry->block_len  = 8;
-					entry->iv_len     = 8;
+					entry->iv_len	  = 8;
 				} else {
 					entry->alg.u.cipher =
 						ODP_CIPHER_ALG_NULL;
@@ -90,7 +110,7 @@ int create_sa_db_entry(char *input, odp_bool_t cipher)
 				if (0 == strcmp(token, "md5")) {
 					entry->alg.u.auth =
 						ODP_AUTH_ALG_MD5_96;
-					entry->icv_len    = 12;
+					entry->icv_len	  = 12;
 				} else {
 					entry->alg.u.auth = ODP_AUTH_ALG_NULL;
 				}
@@ -132,6 +152,89 @@ int create_sa_db_entry(char *input, odp_bool_t cipher)
 	return 0;
 }
 
+int create_tun_db_entry(char *input)
+{
+	int pos = 0;
+	char *local;
+	char *str;
+	char *save;
+	char *token;
+	tun_db_entry_t *entry = &tun_db->array[tun_db->index];
+
+	/* Verify we have a good entry */
+	if (MAX_DB <= tun_db->index)
+		return -1;
+
+	/* Make a local copy */
+	local = malloc(strlen(input) + 1);
+	if (NULL == local)
+		return -1;
+	strcpy(local, input);
+
+	/* Setup for using "strtok_r" to search input string */
+	str = local;
+	save = NULL;
+
+	/* Parse tokens separated by ':' */
+	while (NULL != (token = strtok_r(str, ":", &save))) {
+		str = NULL;  /* reset str for subsequent strtok_r calls */
+
+		/* Parse token based on its position */
+		switch (pos) {
+		case 0:
+			parse_ipv4_string(token, &entry->src_ip, NULL);
+			break;
+		case 1:
+			parse_ipv4_string(token, &entry->dst_ip, NULL);
+			break;
+		case 2:
+			parse_ipv4_string(token, &entry->tun_src_ip, NULL);
+			break;
+		case 3:
+			parse_ipv4_string(token, &entry->tun_dst_ip, NULL);
+			break;
+		default:
+			printf("ERROR: extra token \"%s\" at position %d\n",
+			       token, pos);
+			break;
+		}
+		pos++;
+	}
+
+	/* Verify we parsed exactly the number of tokens we expected */
+	if (4 != pos) {
+		printf("ERROR: \"%s\" contains %d tokens, expected 4\n",
+		       input,
+		       pos);
+		free(local);
+		return -1;
+	}
+
+	/* Add route to the list */
+	tun_db->index++;
+	entry->next = tun_db->list;
+	tun_db->list = entry;
+
+	free(local);
+	return 0;
+}
+
+tun_db_entry_t *find_tun_db_entry(uint32_t ip_src,
+				  uint32_t ip_dst)
+{
+	tun_db_entry_t *entry = NULL;
+
+	/* Scan all entries and return first match */
+	for (entry = tun_db->list; NULL != entry; entry = entry->next) {
+		if (entry->src_ip != ip_src)
+			continue;
+		if (entry->dst_ip != ip_dst)
+			continue;
+		break;
+	}
+	return entry;
+}
+
 void dump_sa_db(void)
 {
 	sa_db_entry_t *entry;
@@ -182,3 +285,28 @@ sa_db_entry_t *find_sa_db_entry(ip_addr_range_t *src,
 	}
 	return entry;
 }
+
+void dump_tun_db(void)
+{
+	tun_db_entry_t *entry;
+
+	printf("\n"
+	       "Tunnel table\n"
+	       "--------------------------\n");
+
+	for (entry = tun_db->list; NULL != entry; entry = entry->next) {
+		char src_ip_str[MAX_STRING];
+		char dst_ip_str[MAX_STRING];
+		char tun_src_ip_str[MAX_STRING];
+		char tun_dst_ip_str[MAX_STRING];
+
+		printf(" %s:%s %s:%s ",
+		       ipv4_addr_str(src_ip_str, entry->src_ip),
+		       ipv4_addr_str(dst_ip_str, entry->dst_ip),
+		       ipv4_addr_str(tun_src_ip_str, entry->tun_src_ip),
+		       ipv4_addr_str(tun_dst_ip_str, entry->tun_dst_ip)
+		      );
+
+		printf("\n");
+	}
+}
diff --git a/example/ipsec/odp_ipsec_sa_db.h b/example/ipsec/odp_ipsec_sa_db.h
index c30cbdb..409e82f 100644
--- a/example/ipsec/odp_ipsec_sa_db.h
+++ b/example/ipsec/odp_ipsec_sa_db.h
@@ -13,6 +13,10 @@ extern "C" {
 
 #include <odp_ipsec_misc.h>
 
+typedef enum sa_mode_s {
+	IPSEC_SA_MODE_TRANSPORT,
+	IPSEC_SA_MODE_TUNNEL
+} sa_mode_t;
 /**
  * Security Assocation (SA) data base entry
  */
@@ -26,6 +30,7 @@ typedef struct sa_db_entry_s {
 	uint32_t              block_len; /**< Cipher block length */
 	uint32_t              iv_len;    /**< Initialization Vector length */
 	uint32_t              icv_len;   /**< Integrity Check Value length */
+	sa_mode_t             mode;      /**< SA mode - transport/tun */
 } sa_db_entry_t;
 
 /**
@@ -69,6 +74,56 @@ sa_db_entry_t *find_sa_db_entry(ip_addr_range_t *src,
 				ip_addr_range_t *dst,
 				odp_bool_t cipher);
 
+/**
+ * Tunnel entry
+ */
+typedef struct tun_db_entry_s {
+	struct tun_db_entry_s *next;
+	uint32_t        src_ip;        /**< Inner Source IPv4 address */
+	uint32_t        dst_ip;        /**< Inner Destination IPv4 address */
+	uint32_t        tun_src_ip; /**< Tunnel Source IPv4 address */
+	uint32_t        tun_dst_ip; /**< Tunnel Source IPv4 address */
+} tun_db_entry_t;
+
+/**
+ * Tunnel database
+ */
+typedef struct tun_db_s {
+	uint32_t         index;          /**< Index of next available entry */
+	tun_db_entry_t *list;	 /**< List of active entries */
+	tun_db_entry_t array[MAX_DB]; /**< Entry storage */
+} tun_db_t;
+
+/** Initialize tun database global control structure */
+void init_tun_db(void);
+
+/**
+ * Create an tunnel DB entry
+ *
+ * String is of the format "SrcIP:DstIP:TunSrcIp:TunDstIp"
+ *
+ * @param input  Pointer to string describing tun
+ *
+ * @return 0 if successful else -1
+ */
+int create_tun_db_entry(char *input);
+
+/**
+ * Display the tun DB
+ */
+void dump_tun_db(void);
+
+/**
+ * Find a matching tun DB entry
+ *
+ * @param ip_src    Inner source IP address
+ * @param ip_dst    Inner destination IP address
+ *
+ * @return pointer to tun DB entry else NULL
+ */
+tun_db_entry_t *find_tun_db_entry(uint32_t ip_src,
+				  uint32_t ip_dst);
+
 #ifdef __cplusplus
 }
 #endif
diff --git a/example/ipsec/odp_ipsec_stream.c b/example/ipsec/odp_ipsec_stream.c
index 35042f5..a140d36 100644
--- a/example/ipsec/odp_ipsec_stream.c
+++ b/example/ipsec/odp_ipsec_stream.c
@@ -169,18 +169,24 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 				uint8_t *dmac,
 				odp_pool_t pkt_pool)
 {
-	ipsec_cache_entry_t *entry = stream->input.entry;
+	ipsec_cache_entry_t *entry = NULL;
 	odp_packet_t pkt;
 	uint8_t *base;
 	uint8_t *data;
 	odph_ethhdr_t *eth;
 	odph_ipv4hdr_t *ip;
+	odph_ipv4hdr_t *inner_ip = NULL;
 	odph_ahhdr_t *ah = NULL;
 	odph_esphdr_t *esp = NULL;
 	odph_icmphdr_t *icmp;
 	stream_pkt_hdr_t *test;
 	unsigned i;
 
+	if (stream->input.entry)
+		entry = stream->input.entry;
+	else if (stream->output.entry)
+		entry = stream->output.entry;
+
 	/* Get packet */
 	pkt = odp_packet_alloc(pkt_pool, 0);
 	if (ODP_PACKET_INVALID == pkt)
@@ -205,13 +211,22 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 	/* Wait until almost finished to fill in mutable fields */
 	memset((char *)ip, 0, sizeof(*ip));
 	ip->ver_ihl = 0x45;
-	ip->proto = ODPH_IPPROTO_ICMP;
 	ip->id = odp_cpu_to_be_16(stream->id);
-	ip->src_addr = odp_cpu_to_be_32(stream->src_ip);
-	ip->dst_addr = odp_cpu_to_be_32(stream->dst_ip);
+	/* Outer IP header in tunnel mode */
+	if (entry && entry->mode == IPSEC_SA_MODE_TUNNEL &&
+	    (entry == stream->input.entry)) {
+		ip->proto = ODPH_IPV4;
+		ip->src_addr = odp_cpu_to_be_32(entry->tun_src_ip);
+		ip->dst_addr = odp_cpu_to_be_32(entry->tun_dst_ip);
+	} else {
+		ip->proto = ODPH_IPPROTO_ICMP;
+		ip->src_addr = odp_cpu_to_be_32(stream->src_ip);
+		ip->dst_addr = odp_cpu_to_be_32(stream->dst_ip);
+	}
 
 	/* AH (if specified) */
-	if (entry && (ODP_AUTH_ALG_NULL != entry->ah.alg)) {
+	if (entry && (entry == stream->input.entry) &&
+	    (ODP_AUTH_ALG_NULL != entry->ah.alg)) {
 		if (ODP_AUTH_ALG_MD5_96 != entry->ah.alg)
 			abort();
 
@@ -226,7 +241,8 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 	}
 
 	/* ESP (if specified) */
-	if (entry && (ODP_CIPHER_ALG_NULL != entry->esp.alg)) {
+	if (entry && (entry == stream->input.entry) &&
+	    (ODP_CIPHER_ALG_NULL != entry->esp.alg)) {
 		if (ODP_CIPHER_ALG_3DES_CBC != entry->esp.alg)
 			abort();
 
@@ -239,6 +255,23 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 		RAND_bytes(esp->iv, 8);
 	}
 
+	/* Inner IP header in tunnel mode */
+	if (entry && (entry == stream->input.entry) &&
+	    (entry->mode == IPSEC_SA_MODE_TUNNEL)) {
+		inner_ip = (odph_ipv4hdr_t *)data;
+		memset((char *)inner_ip, 0, sizeof(*inner_ip));
+		inner_ip->ver_ihl = 0x45;
+		inner_ip->proto = ODPH_IPPROTO_ICMP;
+		inner_ip->id = odp_cpu_to_be_16(stream->id);
+		inner_ip->ttl = 64;
+		inner_ip->tos = 0;
+		inner_ip->frag_offset = 0;
+		inner_ip->src_addr = odp_cpu_to_be_32(stream->src_ip);
+		inner_ip->dst_addr = odp_cpu_to_be_32(stream->dst_ip);
+		inner_ip->chksum = odp_chksum(inner_ip, sizeof(inner_ip));
+		data += sizeof(*inner_ip);
+	}
+
 	/* ICMP header so we can see it on wireshark */
 	icmp = (odph_icmphdr_t *)data;
 	data += sizeof(*icmp);
@@ -261,6 +294,13 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 	/* Close ESP if specified */
 	if (esp) {
 		int payload_len = data - (uint8_t *)icmp;
+		uint8_t *encrypt_start = (uint8_t *)icmp;
+
+		if (entry->mode == IPSEC_SA_MODE_TUNNEL) {
+			payload_len = data - (uint8_t *)inner_ip;
+			encrypt_start = (uint8_t *)inner_ip;
+		}
+
 		int encrypt_len;
 		odph_esptrl_t *esp_t;
 		DES_key_schedule ks1, ks2, ks3;
@@ -282,8 +322,8 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 		DES_set_key((DES_cblock *)&entry->esp.key.data[8], &ks2);
 		DES_set_key((DES_cblock *)&entry->esp.key.data[16], &ks3);
 
-		DES_ede3_cbc_encrypt((uint8_t *)icmp,
-				     (uint8_t *)icmp,
+		DES_ede3_cbc_encrypt(encrypt_start,
+				     encrypt_start,
 				     encrypt_len,
 				     &ks1,
 				     &ks2,
@@ -332,7 +372,7 @@ odp_packet_t create_ipv4_packet(stream_db_entry_t *stream,
 odp_bool_t verify_ipv4_packet(stream_db_entry_t *stream,
 			      odp_packet_t pkt)
 {
-	ipsec_cache_entry_t *entry = stream->output.entry;
+	ipsec_cache_entry_t *entry = NULL;
 	uint8_t *data;
 	odph_ipv4hdr_t *ip;
 	odph_ahhdr_t *ah = NULL;
@@ -340,6 +380,12 @@ odp_bool_t verify_ipv4_packet(stream_db_entry_t *stream,
 	int hdr_len;
 	odph_icmphdr_t *icmp;
 	stream_pkt_hdr_t *test;
+	uint32_t src_ip, dst_ip;
+
+	if (stream->input.entry)
+		entry = stream->input.entry;
+	else if (stream->output.entry)
+		entry = stream->output.entry;
 
 	/* Basic IPv4 verify (add checksum verification) */
 	data = odp_packet_l3_ptr(pkt, NULL);
@@ -347,13 +393,29 @@ odp_bool_t verify_ipv4_packet(stream_db_entry_t *stream,
 	data += sizeof(*ip);
 	if (0x45 != ip->ver_ihl)
 		return FALSE;
-	if (stream->src_ip != odp_be_to_cpu_32(ip->src_addr))
+
+	src_ip = odp_be_to_cpu_32(ip->src_addr);
+	dst_ip = odp_be_to_cpu_32(ip->dst_addr);
+	if ((stream->src_ip != src_ip) && stream->output.entry &&
+	    (stream->output.entry->tun_src_ip != src_ip))
 		return FALSE;
-	if (stream->dst_ip != odp_be_to_cpu_32(ip->dst_addr))
+	if ((stream->dst_ip != dst_ip) && stream->output.entry &&
+	    (stream->output.entry->tun_dst_ip != dst_ip))
+		return FALSE;
+
+	if ((stream->src_ip != src_ip) && stream->input.entry &&
+	    (stream->input.entry->tun_src_ip != src_ip))
+		return FALSE;
+	if ((stream->dst_ip != dst_ip) && stream->input.entry &&
+	    (stream->input.entry->tun_dst_ip != dst_ip))
 		return FALSE;
 
 	/* Find IPsec headers if any and compare against entry */
 	hdr_len = locate_ipsec_headers(ip, &ah, &esp);
+
+	/* Cleartext packet */
+	if (!ah && !esp)
+		goto clear_packet;
 	if (ah) {
 		if (!entry)
 			return FALSE;
@@ -446,12 +508,22 @@ odp_bool_t verify_ipv4_packet(stream_db_entry_t *stream,
 		ip->proto = esp_t->next_header;
 	}
 
-	/* Verify ICMP packet */
-	if (ODPH_IPPROTO_ICMP != ip->proto)
-		return FALSE;
+clear_packet:
+	/* Verify IP/ICMP packet */
+	if (entry && (entry->mode == IPSEC_SA_MODE_TUNNEL) && (ah || esp)) {
+		if (ODPH_IPV4 != ip->proto)
+			return FALSE;
+		odph_ipv4hdr_t *inner_ip = (odph_ipv4hdr_t *)data;
+
+		icmp = (odph_icmphdr_t *)(inner_ip + 1);
+		data = (uint8_t *)icmp;
+	} else {
+		if (ODPH_IPPROTO_ICMP != ip->proto)
+			return FALSE;
+		icmp = (odph_icmphdr_t *)data;
+	}
 
 	/* Verify ICMP header */
-	icmp = (odph_icmphdr_t *)data;
 	data += sizeof(*icmp);
 	if (ICMP_ECHO != icmp->type)
 		return FALSE;
