Troubleshooting NSX-T TEP Interface Status Degraded Due to DHCP IP Allocation Failure

Products

• VMware NSX

Issue/Introduction

• ESXi host transport nodes show a "Degraded" status in the NSX Manager UI under System > Fabric > Hosts.
• The NSX_VDL2 service is reported as "Down" or "Degraded."
• TEP interfaces configured for DHCP fail to acquire valid IP addresses from the DHCP server.
• TEP interfaces default to an address within the Link-Local address range (169.254.x.x), which is insufficient for NSX tunnel overlay communication.
• Overlay traffic (including vMotion of VMs on NSX-backed segments) may fail or become intermittent.

Environment

VMware NSX
VMware Cloud Foundation (VCF)

Cause

The NSX_VDL2 service fails to initialize because the TEP interface cannot obtain a routable IP address via DHCP. When DHCP discovery fails, the interface falls back to a Link-Local address, which prevents the establishment of BFD tunnels and communication with other transport nodes.

Resolution

Follow the below steps to correct the IP address issue:

1. Make sure that the DHCP scope has sufficient available addresses and is not exhausted. Also, ensure the DHCP server is reachable from the TEP VLAN and that the DHCP relay configuration is correct and active.

2. If DHCP infrastructure cannot be immediately remediated, reassign the TEP configuration to utilize the management VMkernel adapter or a static IP pool to provide the TEP with a valid, routable IP address.

Once the TEP interface has obtained a valid IP address, the NSX_VDL2 service should initialize and transition to an "UP" state.

Additional Information

If the service remains degraded after the IP address is corrected, you may need to power cycle the VMs on the affected host or perform a maintenance mode reboot of the ESXi host to force a re-initiation of BFD tunnel communication.