diff --git a/controller/binding.c b/controller/binding.c
index c7a2b3f10..5932ad785 100644
--- a/controller/binding.c
+++ b/controller/binding.c
@@ -509,6 +509,30 @@ update_ld_multichassis_ports(const struct sbrec_port_binding *binding_rec,
     }
 }
 
+static void
+update_ld_vtep_port(const struct sbrec_port_binding *binding_rec,
+                    struct hmap *local_datapaths)
+{
+    struct local_datapath *ld
+        = get_local_datapath(local_datapaths,
+                             binding_rec->datapath->tunnel_key);
+    if (!ld) {
+        return;
+    }
+
+    if (ld->vtep_port && strcmp(ld->vtep_port->logical_port,
+                                binding_rec->logical_port)) {
+        static struct vlog_rate_limit rl = VLOG_RATE_LIMIT_INIT(5, 1);
+        VLOG_WARN_RL(&rl, "vtep port '%s' already set for datapath "
+                     "'%"PRId64"', skipping the new port '%s'.",
+                     ld->vtep_port->logical_port,
+                     binding_rec->datapath->tunnel_key,
+                     binding_rec->logical_port);
+        return;
+    }
+    ld->vtep_port = binding_rec;
+}
+
 static void
 update_ld_localnet_port(const struct sbrec_port_binding *binding_rec,
                         struct shash *bridge_mappings,
@@ -1987,6 +2011,7 @@ binding_run(struct binding_ctx_in *b_ctx_in, struct binding_ctx_out *b_ctx_out)
     struct ovs_list external_lports = OVS_LIST_INITIALIZER(&external_lports);
     struct ovs_list multichassis_ports = OVS_LIST_INITIALIZER(
                                                         &multichassis_ports);
+    struct ovs_list vtep_lports = OVS_LIST_INITIALIZER(&vtep_lports);
 
     struct lport {
         struct ovs_list list_node;
@@ -2010,8 +2035,13 @@ binding_run(struct binding_ctx_in *b_ctx_in, struct binding_ctx_out *b_ctx_out)
 
         switch (lport_type) {
         case LP_PATCH:
+            update_related_lport(pb, b_ctx_out);
+            break;
         case LP_VTEP:
             update_related_lport(pb, b_ctx_out);
+            struct lport *vtep_lport = xmalloc(sizeof *vtep_lport);
+            vtep_lport->pb = pb;
+            ovs_list_push_back(&vtep_lports, &vtep_lport->list_node);
             break;
 
         case LP_LOCALPORT:
@@ -2111,6 +2141,16 @@ binding_run(struct binding_ctx_in *b_ctx_in, struct binding_ctx_out *b_ctx_out)
         free(multichassis_lport);
     }
 
+    /* Run through vtep lport list to see if there are vtep ports
+     * on local datapaths discovered from above loop, and update the
+     * corresponding local datapath accordingly. */
+    struct lport *vtep_lport;
+    ovs_list_size(&vtep_lports);
+    LIST_FOR_EACH_POP (vtep_lport, list_node, &vtep_lports) {
+        update_ld_vtep_port(vtep_lport->pb, b_ctx_out->local_datapaths);
+        free(vtep_lport);
+    }
+
     shash_destroy(&bridge_mappings);
     /* Remove stale QoS entries. */
     ovs_qos_entries_gc(b_ctx_in->ovs_idl_txn, b_ctx_in->ovsrec_port_by_qos,
@@ -2175,6 +2215,11 @@ remove_pb_from_local_datapath(const struct sbrec_port_binding *pb,
         }
     } else if (!strcmp(pb->type, "external")) {
         remove_local_datapath_external_port(ld, pb->logical_port);
+    } else if (!strcmp(pb->type, "vtep")) {
+        if (ld->vtep_port && !strcmp(ld->vtep_port->logical_port,
+                                     pb->logical_port)) {
+            ld->vtep_port = NULL;
+        }
     }
     remove_local_datapath_multichassis_port(ld, pb->logical_port);
 }
@@ -2836,6 +2881,7 @@ handle_updated_port(struct binding_ctx_in *b_ctx_in,
 
     case LP_VTEP:
         update_related_lport(pb, b_ctx_out);
+        update_ld_vtep_port(pb, b_ctx_out->local_datapaths);
         /* VTEP lports are claimed/released by ovn-controller-vteps.
          * We are not sure what changed. */
         b_ctx_out->non_vif_ports_changed = true;
@@ -3091,6 +3137,8 @@ delete_done:
                 } else if (pb->n_additional_chassis) {
                     update_ld_multichassis_ports(pb,
                                                  b_ctx_out->local_datapaths);
+                } else if (lport_type == LP_VTEP) {
+                    update_ld_vtep_port(pb, b_ctx_out->local_datapaths);
                 }
             }
             sbrec_port_binding_index_destroy_row(target);
diff --git a/controller/local_data.h b/controller/local_data.h
index 748f009aa..19d13a558 100644
--- a/controller/local_data.h
+++ b/controller/local_data.h
@@ -50,6 +50,9 @@ struct local_datapath {
     /* The localnet port in this datapath, if any (at most one is allowed). */
     const struct sbrec_port_binding *localnet_port;
 
+    /* The vtep port in this datapath, if any (at most one is allowed). */
+    const struct sbrec_port_binding *vtep_port;
+
     struct {
         const struct sbrec_port_binding *local;
         const struct sbrec_port_binding *remote;
diff --git a/controller/physical.c b/controller/physical.c
index 2925dcd1d..b75e120c7 100644
--- a/controller/physical.c
+++ b/controller/physical.c
@@ -194,6 +194,15 @@ get_localnet_port(const struct hmap *local_datapaths, int64_t tunnel_key)
 }
 
 
+static const struct sbrec_port_binding *
+get_vtep_port(const struct hmap *local_datapaths, int64_t tunnel_key)
+{
+    const struct local_datapath *ld = get_local_datapath(local_datapaths,
+                                                         tunnel_key);
+    return ld ? ld->vtep_port : NULL;
+}
+
+
 static struct zone_ids
 get_zone_ids(const struct sbrec_port_binding *binding,
              const struct simap *ct_zones)
@@ -1732,7 +1741,7 @@ consider_mc_group(struct ovsdb_idl_index *sbrec_port_binding_by_name,
     struct sset remote_chassis = SSET_INITIALIZER(&remote_chassis);
     struct sset vtep_chassis = SSET_INITIALIZER(&vtep_chassis);
 
-    struct match match;
+    struct match match, match_ramp;
     match_outport_dp_and_port_keys(&match, dp_key, mc->tunnel_key);
 
     /* Go through all of the ports in the multicast group:
@@ -1755,10 +1764,10 @@ consider_mc_group(struct ovsdb_idl_index *sbrec_port_binding_by_name,
      *      set the output port to be the router patch port for which
      *      the redirect port was added.
      */
-    struct ofpbuf ofpacts;
+    struct ofpbuf ofpacts, remote_ofpacts, remote_ofpacts_ramp;
     ofpbuf_init(&ofpacts, 0);
-    struct ofpbuf remote_ofpacts;
     ofpbuf_init(&remote_ofpacts, 0);
+    ofpbuf_init(&remote_ofpacts_ramp, 0);
     for (size_t i = 0; i < mc->n_ports; i++) {
         struct sbrec_port_binding *port = mc->ports[i];
 
@@ -1783,6 +1792,7 @@ consider_mc_group(struct ovsdb_idl_index *sbrec_port_binding_by_name,
                 local_output_pb(port->tunnel_key, &ofpacts);
             } else {
                 local_output_pb(port->tunnel_key, &remote_ofpacts);
+                local_output_pb(port->tunnel_key, &remote_ofpacts_ramp);
             }
         } if (!strcmp(port->type, "remote")) {
             if (port->chassis) {
@@ -1866,6 +1876,35 @@ consider_mc_group(struct ovsdb_idl_index *sbrec_port_binding_by_name,
              * multicast group as the logical output port. */
             put_load(mc->tunnel_key, MFF_LOG_OUTPORT, 0, 32,
                      &remote_ofpacts);
+
+            if (get_vtep_port(local_datapaths, mc->datapath->tunnel_key)) {
+                match_set_reg_masked(&match, MFF_LOG_FLAGS - MFF_REG0, 0,
+                                     MLF_RCV_FROM_RAMP);
+
+                put_load(mc->tunnel_key, MFF_LOG_OUTPORT, 0, 32,
+                         &remote_ofpacts_ramp);
+
+                /* MCAST traffic which was originally received from RAMP_SWITCH
+                 * is not allowed to be re-sent to remote_chassis.
+                 * Process "patch" port binding for routing in
+                 * OFTABLE_REMOTE_OUTPUT and resubmit packets to
+                 * OFTABLE_LOCAL_OUTPUT for local delivery. */
+
+                match_outport_dp_and_port_keys(&match_ramp, dp_key,
+                                               mc->tunnel_key);
+
+                /* Match packets coming from RAMP_SWITCH and allowed for
+                * loopback processing (including routing). */
+                match_set_reg_masked(&match_ramp, MFF_LOG_FLAGS - MFF_REG0,
+                                     MLF_RCV_FROM_RAMP | MLF_ALLOW_LOOPBACK,
+                                     MLF_RCV_FROM_RAMP | MLF_ALLOW_LOOPBACK);
+
+                put_resubmit(OFTABLE_LOCAL_OUTPUT, &remote_ofpacts_ramp);
+
+                ofctrl_add_flow(flow_table, OFTABLE_REMOTE_OUTPUT, 120,
+                                mc->header_.uuid.parts[0], &match_ramp,
+                                &remote_ofpacts_ramp, &mc->header_.uuid);
+            }
         }
 
         fanout_to_chassis(mff_ovn_geneve, &remote_chassis, chassis_tunnels,
@@ -1886,6 +1925,7 @@ consider_mc_group(struct ovsdb_idl_index *sbrec_port_binding_by_name,
     }
     ofpbuf_uninit(&ofpacts);
     ofpbuf_uninit(&remote_ofpacts);
+    ofpbuf_uninit(&remote_ofpacts_ramp);
     sset_destroy(&remote_chassis);
     sset_destroy(&vtep_chassis);
 }
diff --git a/northd/northd.c b/northd/northd.c
index e713973e7..6dcbf0e1a 100644
--- a/northd/northd.c
+++ b/northd/northd.c
@@ -7849,6 +7849,16 @@ build_vtep_hairpin(struct ovn_datapath *od, struct hmap *lflows)
                           ds_cstr(&match), "next;");
         }
     }
+
+    /* ARP/Neighbor Solicitation requests must skip ls_in_arp_rsp table for
+     * packets arrived from HW VTEP (ramp) switch.
+     * Neighbor resolution for router ports is done in logical router ingress
+     * pipeline.  ARP resolution for vif lports is done directly by vif ports.
+     */
+    ovn_lflow_add(lflows, od, S_SWITCH_IN_ARP_ND_RSP, 65535,
+                  REGBIT_FROM_RAMP" == 1 && (arp || nd_ns)",
+                  "flags.loopback = 1; next;");
+
     ds_destroy(&match);
 }
 
diff --git a/northd/ovn-northd.8.xml b/northd/ovn-northd.8.xml
index 8164be300..1a9e50b6f 100644
--- a/northd/ovn-northd.8.xml
+++ b/northd/ovn-northd.8.xml
@@ -1378,6 +1378,12 @@
      </p>
 
     <ul>
+      <li>
+        If packet was received from HW VTEP (ramp switch), and this packet is
+        ARP or Neighbor Solicitation, such packet is passed to next table with
+        max proirity.  ARP/ND requests from HW VTEP must be handled in logical
+        router ingress pipeline.
+      </li>
       <li>
         If the logical switch has no router ports with options:arp_proxy
         configured add a priority-100 flows to skip the ARP responder if inport
diff --git a/tests/ovn.at b/tests/ovn.at
index 53349530b..cb643c39d 100644
--- a/tests/ovn.at
+++ b/tests/ovn.at
@@ -4267,7 +4267,7 @@ ovn_start
 ovn-nbctl ls-add lsw0
 
 ovn-nbctl lsp-add lsw0 lp1
-ovn-nbctl lsp-set-addresses lp1 f0:00:00:00:00:01
+ovn-nbctl lsp-set-addresses lp1 'f0:00:00:00:00:01 192.168.1.24'
 
 ovn-nbctl lsp-add lsw0 lp2
 ovn-nbctl lsp-set-addresses lp2 f0:00:00:00:00:02
@@ -4288,7 +4288,6 @@ ovn-nbctl set Logical_Switch_Port lpr \
 ovn-nbctl lrp-set-gateway-chassis lrp1 hv1
 
 ovn-nbctl lsp-add lsw0 lpr2
-ovn-nbctl lr-add lr2
 ovn-nbctl lrp-add lr lrp2 f0:00:00:00:00:f2 192.168.1.254/24
 ovn-nbctl set Logical_Switch_Port lpr2 \
     type=router \
@@ -4421,6 +4420,7 @@ spa=`ip_to_hex 192 168 1 2`
 tpa=`ip_to_hex 192 168 1 1`
 request=ffffffffffff${sha}08060001080006040001${sha}${spa}ffffffffffff${tpa}
 as hv3 ovs-appctl netdev-dummy/receive vif3 $request
+echo $request >> 1.expected
 echo $request >> 2.expected
 
 lrpmac=f000000000f1
@@ -4431,12 +4431,107 @@ response=${sha}${lrpmac}08060001080006040002${lrpmac}${tpa}${sha}${spa}
 # we expect arp reply packet on hv3
 echo $response >> 3.expected
 
+# Ensure there is no MAC_Binding, send GARP from vtep side,
+# check that GARP was received by vif1, vif2 and MAC_Binding was created.
+wait_row_count MAC_Binding 0 ip="192.168.1.200" mac='"f0:00:00:00:00:12"'
+
+sha=0200000000ff
+tha=ffffffffffff
+spa=`ip_to_hex 192 168 1 200`
+tpa=$spa
+garp=ffffffffffff${sha}08060001080006040002${sha}${spa}${tha}${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $garp
+echo $garp >> 1.expected
+echo $garp >> 2.expected
+
+wait_row_count MAC_Binding 2 ip="192.168.1.200" mac='"02:00:00:00:00:ff"'
+
+# Send same GARP with changed SHA and ensure MAC_Binding was updated.
+sha=0200000000ee
+garp=ffffffffffff${sha}08060001080006040002${sha}${spa}${tha}${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $garp
+echo $garp >> 1.expected
+echo $garp >> 2.expected
+
+wait_row_count MAC_Binding 2 ip="192.168.1.200" mac='"02:00:00:00:00:ee"'
+
+# Remove local ports on hv1 and check that ARP logic is stil working. -->
+check as hv1 ovs-vsctl remove interface vif1 external_ids iface-id
+hv_uuid=$(fetch_column Chassis _uuid name=hv1)
+wait_row_count Port_Binding 0 chassis="$hv_uuid" type="''"
+
+# Cleanup MAC_Bindings after previous checks.
+check ovn-sbctl --all destroy MAC_Binding
+
+# ARP request from VTEP to LRP should be responded by ARP responder.
+sha=f00000000003
+spa=`ip_to_hex 192 168 1 2`
+tpa=`ip_to_hex 192 168 1 1`
+request=ffffffffffff${sha}08060001080006040001${sha}${spa}ffffffffffff${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $request
+echo $request >> 2.expected
+
+lrpmac=f000000000f1
+response=${sha}${lrpmac}08060001080006040002${lrpmac}${tpa}${sha}${spa}
+# since lrp1 has gateway chassis set on hv1, hv1 will suppress arp request and
+# answer with arp reply by OVS directly to vtep lport. all other lports,
+# except lport from which this request was initiated, will receive arp request.
+# we expect arp reply packet on hv3
+echo $response >> 3.expected
+
+# Ensure there is no MAC_Binding, send GARP from vtep side,
+# check that GARP was received by vif1, vif2 and MAC_Binding was created.
+wait_row_count MAC_Binding 0 ip="192.168.1.200" mac='"f0:00:00:00:00:12"'
+
+sha=0200000000ff
+tha=ffffffffffff
+spa=`ip_to_hex 192 168 1 200`
+tpa=$spa
+garp=ffffffffffff${sha}08060001080006040002${sha}${spa}${tha}${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $garp
+echo $garp >> 2.expected
+
+wait_row_count MAC_Binding 2 ip="192.168.1.200" mac='"02:00:00:00:00:ff"'
+
+# Send same GARP with changed SHA and ensure MAC_Binding was updated.
+sha=0200000000ee
+garp=ffffffffffff${sha}08060001080006040002${sha}${spa}${tha}${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $garp
+echo $garp >> 2.expected
+
+wait_row_count MAC_Binding 2 ip="192.168.1.200" mac='"02:00:00:00:00:ee"'
+
+# Restore.
+check as hv1 ovs-vsctl set interface vif1 external_ids:iface-id=lp1
+wait_row_count Port_Binding 1 chassis="$hv_uuid" type='""'
+# <--
+
+# Check ARP response to request for IP on VIF port sent from vtep.
+# ARP request from VTEP to LSP's IP must be answered only by LSP vif1 (lp1).
+sha=f00000000003
+spa=`ip_to_hex 192 168 1 2`
+tpa=`ip_to_hex 192 168 1 24`
+request=ffffffffffff${sha}08060001080006040001${sha}${spa}ffffffffffff${tpa}
+as hv3 ovs-appctl netdev-dummy/receive vif3 $request
+echo $request >> 1.expected
+echo $request >> 2.expected
+
+# Simulate response from vif.
+sha=f00000000001
+tha=f00000000003
+spa=`ip_to_hex 192 168 1 200`
+tpa=`ip_to_hex 192 168 1 2`
+response=${tha}${sha}08060001080006040002${sha}${spa}${tha}${tpa}
+as hv1 ovs-appctl netdev-dummy/receive vif1 $response
+echo $response >> 3.expected
+
 # First ensure basic flow contents are as we expect.
 AT_CHECK([ovn-sbctl lflow-list lsw0 | grep 'reg0[\[14\]]' | sort | sed 's/table=../table=??/g'], [0], [dnl
   table=??(ls_in_check_port_sec), priority=70   , match=(inport == "lp-vtep"), action=(reg0[[14]] = 1; next(pipeline=ingress, table=??);)
   table=??(ls_in_hairpin      ), priority=1000 , match=(reg0[[14]] == 1), action=(next(pipeline=ingress, table=??);)
   table=??(ls_in_hairpin      ), priority=2000 , match=(reg0[[14]] == 1 && is_chassis_resident("cr-lrp1")), action=(next;)
   table=??(ls_in_hairpin      ), priority=2000 , match=(reg0[[14]] == 1 && is_chassis_resident("cr-lrp2")), action=(next;)
+  table=??(ls_in_arp_rsp      ), priority=65535, match=(reg0[[14]] == 1 && (arp || nd_ns)), action=(flags.loopback = 1; next;)
 ])
 
 # dump information with counters
