Layer 2 switching refers to forwarding data frames based on information found at the Data Link layer (Layer 2 of the OSI model) — specifically, the destination MAC address — rather than on IP addresses (Layer 3, used by routers).

A Layer 2 switch is essentially a multi-port bridge: it connects multiple devices within a LAN and intelligently forwards each incoming frame only out the port leading to its actual destination, instead of broadcasting it out every port like a hub.

Functioning of a Layer 2 switch

1. Learning — for every frame that arrives, the switch inspects the source MAC address and the port it came in on, and records this pairing in its MAC address table (also called a CAM table — Content Addressable Memory table). Over time it "learns" which devices sit behind which ports.

2. Forwarding/Filtering — for the frame's destination MAC address, the switch looks it up in its MAC address table:

   • If found, the frame is forwarded only out the specific port associated with that address (unicast forwarding) — not out every port.
   • If not found (an "unknown unicast"), the switch floods the frame out every port except the one it arrived on, since it doesn't yet know where that address lives.

3. Aging — entries in the MAC address table are automatically removed after a period of inactivity, keeping the table current as devices move or disconnect.

4. Broadcast/Multicast handling — broadcast frames (destination FF:FF:FF:FF:FF:FF) and unknown-destination frames are flooded to all ports (except the source), ensuring they reach every device, since these inherently need wide delivery.

5. Collision domain segmentation — each switch port is its own separate collision domain (unlike a hub, where all ports share one collision domain), allowing full-duplex, essentially collision-free communication on each link and letting multiple conversations happen simultaneously across different port pairs.

Benefit: by making per-frame forwarding decisions based on learned MAC addresses, a Layer 2 switch dramatically reduces unnecessary traffic compared to a hub, increases effective bandwidth (since unrelated conversations don't interfere with each other), and eliminates most collisions — all while remaining transparent to higher-layer protocols, since it never inspects IP addresses or routing information.