VPC Peering and Transit Gateway

As organisations grow on AWS, they typically run multiple VPCs — for different applications, environments (dev/staging/prod), teams, or even separate AWS accounts. Connecting these VPCs securely and efficiently is critical. AWS provides two primary mechanisms: VPC Peering for simple point-to-point connections and Transit Gateway for hub-and-spoke architectures at scale.

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VPC Peering

A VPC peering connection is a networking link between two VPCs that enables traffic to flow between them using private IPv4 or IPv6 addresses. Instances in either VPC can communicate as if they were in the same network.

Key Properties

Property	Detail
Scope	Same Region or cross-Region (inter-Region peering)
Accounts	Same account or different accounts
Transitivity	Non-transitive — traffic does not pass through a peered VPC to reach a third
CIDR overlap	VPCs with overlapping CIDR blocks cannot be peered
Cost	No hourly charge; standard data transfer rates apply (cross-AZ / cross-Region)
Bandwidth	No aggregate bandwidth limit
Encryption	Traffic is encrypted when crossing Regions; within a Region it stays on the AWS backbone