A packet processing method, wherein the method is applied to a network system that comprises a first provider edge, PE, device, a second PE device, a third PE device, and a customer edge, CE, device, the CE device is dual-homed to the first PE device and the second PE device through multi chassis trunk, MC-trunk, links, a port that is of the first PE device and that is connected to the CE device is in an activated state, a port that is of the second PE device and that is connected to the CE device is in a deactivated state, the first PE device and the second PE device each communicate with the third PE device through virtual extensible local area network, VXLAN, tunnels, and the method comprises: determining, by the first PE device based on a case in which a first fault detection packet from the CE device is not received within a preset period, that a fault occurs on a link between the first PE device and the CE device, switching the port that is of the first PE device and that is connected to the CE device from the activated state to the deactivated state, and switching the port that is of the second PE and that is connected to the CE device from the deactivated state to the activated state, and stopping sending a port status packet to the second PE device, wherein the port status packet is used to indicate that the port that is of the first PE device and that is connected to the CE device is in a normal state; sending, by the first PE device, a Media Access Control, MAC, entry update packet to the third PE device, wherein the MAC entry update packet is used to instruct the third PE device to delete a first MAC entry whose packet forwarding destination address is the first PE device, wherein the network system further comprises a control device, and correspondingly, the sending, by the first PE device, a Media Access Control, MAC, entry update packet to the third PE device comprises: sending, by the first PE device, the MAC entry update packet to the control device, wherein the MAC entry update packet is a notification message, the notification message is used to instruct the control device to generate a Media Access Control-withdraw, MAC-withdraw, packet and send the MAC-withdraw packet to the third PE device, and the MAC-withdraw packet is used to instruct the third PE device to delete the first MAC entry whose packet forwarding destination address is the first PE device. determining, by the first PE device based on a case in which a first fault detection packet from the CE device is not received within a preset period, that a fault occurs on a link between the first PE device and the CE device, switching the port that is of the first PE device and that is connected to the CE device from the activated state to the deactivated state, and switching the port that is of the second PE and that is connected to the CE device from the deactivated state to the activated state, and stopping sending a port status packet to the second PE device, wherein the port status packet is used to indicate that the port that is of the first PE device and that is connected to the CE device is in a normal state; sending, by the first PE device, a Media Access Control, MAC, entry update packet to the third PE device, wherein the MAC entry update packet is used to instruct the third PE device to delete a first MAC entry whose packet forwarding destination address is the first PE device, wherein the network system further comprises a control device, and correspondingly, the sending, by the first PE device, a Media Access Control, MAC, entry update packet to the third PE device comprises: sending, by the first PE device, the MAC entry update packet to the control device, wherein the MAC entry update packet is a notification message, the notification message is used to instruct the control device to generate a Media Access Control-withdraw, MAC-withdraw, packet and send the MAC-withdraw packet to the third PE device, and the MAC-withdraw packet is used to instruct the third PE device to delete the first MAC entry whose packet forwarding destination address is the first PE device.