Hi there, You cannot create L2VPN on the Palo Alto. The document referenced by @asangra shows a PA in L2 mode, but the IPSec tunnel created is between a router and L3 mode PA. The encapsulated tunnel is Layer 3. If you wanted to create a L2VPN you would need to do it between two routers. Regarding which is better, it is dependent on the traffic type. Some network services operate at Layer2 only and cannot be routed, so an L2VPN between sites is the only viable option. From a security perspective as you have seen, the PA can operate in either mode to provide security. cheers, Seb.
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