diff --git a/apps/openstacknetworking/src/main/java/org/onosproject/openstacknetworking/impl/OpenstackRoutingArpHandler.java b/apps/openstacknetworking/src/main/java/org/onosproject/openstacknetworking/impl/OpenstackRoutingArpHandler.java
new file mode 100644
index 0000000..0bf93dc
--- /dev/null
+++ b/apps/openstacknetworking/src/main/java/org/onosproject/openstacknetworking/impl/OpenstackRoutingArpHandler.java
@@ -0,0 +1,143 @@
+/*
+ * Copyright 2016-present Open Networking Laboratory
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package org.onosproject.openstacknetworking.impl;
+
+import org.apache.felix.scr.annotations.Activate;
+import org.apache.felix.scr.annotations.Component;
+import org.apache.felix.scr.annotations.Deactivate;
+import org.apache.felix.scr.annotations.Reference;
+import org.apache.felix.scr.annotations.ReferenceCardinality;
+import org.onlab.packet.ARP;
+import org.onlab.packet.Ethernet;
+import org.onlab.packet.Ip4Address;
+import org.onlab.packet.IpAddress;
+import org.onlab.packet.MacAddress;
+import org.onosproject.net.flow.DefaultTrafficTreatment;
+import org.onosproject.net.flow.TrafficTreatment;
+import org.onosproject.net.packet.DefaultOutboundPacket;
+import org.onosproject.net.packet.InboundPacket;
+import org.onosproject.net.packet.PacketContext;
+import org.onosproject.net.packet.PacketProcessor;
+import org.onosproject.net.packet.PacketService;
+import org.onosproject.openstackinterface.OpenstackInterfaceService;
+import org.onosproject.openstackinterface.OpenstackPort;
+import org.onosproject.scalablegateway.api.ScalableGatewayService;
+import org.onosproject.openstacknetworking.api.Constants;
+import org.slf4j.Logger;
+
+import java.nio.ByteBuffer;
+import java.util.concurrent.ExecutorService;
+
+import static java.util.concurrent.Executors.newSingleThreadExecutor;
+import static org.onlab.util.Tools.groupedThreads;
+import static org.onosproject.openstacknetworking.api.Constants.DEVICE_OWNER_FLOATING_IP;
+import static org.onosproject.openstacknetworking.api.Constants.DEVICE_OWNER_ROUTER_GATEWAY;
+import static org.slf4j.LoggerFactory.getLogger;
+
+/**
+ * Handle ARP, ICMP and NAT packets from gateway nodes.
+ */
+@Component(immediate = true)
+public class OpenstackRoutingArpHandler {
+    private final Logger log = getLogger(getClass());
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected PacketService packetService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected OpenstackInterfaceService openstackService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected ScalableGatewayService gatewayService;
+
+    private final ExecutorService executorService =
+            newSingleThreadExecutor(groupedThreads("onos/openstackrouting", "packet-event", log));
+
+    private final InternalPacketProcessor packetProcessor = new InternalPacketProcessor();
+
+    @Activate
+    protected void activate() {
+        packetService.addProcessor(packetProcessor, PacketProcessor.director(1));
+        log.info("Started");
+    }
+
+    @Deactivate
+    protected void deactivate() {
+        packetService.removeProcessor(packetProcessor);
+        log.info("Stopped");
+    }
+
+    private void processArpPacket(PacketContext context, Ethernet ethernet) {
+        ARP arp = (ARP) ethernet.getPayload();
+        log.trace("arpEvent called from {} to {}",
+                Ip4Address.valueOf(arp.getSenderProtocolAddress()).toString(),
+                Ip4Address.valueOf(arp.getTargetProtocolAddress()).toString());
+
+        if (arp.getOpCode() != ARP.OP_REQUEST) {
+            return;
+        }
+
+        IpAddress targetIp = Ip4Address.valueOf(arp.getTargetProtocolAddress());
+        if (getTargetMacForTargetIp(targetIp.getIp4Address()) == MacAddress.NONE) {
+            return;
+        }
+
+        MacAddress targetMac = Constants.DEFAULT_EXTERNAL_ROUTER_MAC;
+        Ethernet ethReply = ARP.buildArpReply(targetIp.getIp4Address(),
+                targetMac, ethernet);
+
+        TrafficTreatment treatment = DefaultTrafficTreatment.builder()
+                .setOutput(context.inPacket().receivedFrom().port())
+                .build();
+
+        packetService.emit(new DefaultOutboundPacket(
+                context.inPacket().receivedFrom().deviceId(),
+                treatment,
+                ByteBuffer.wrap(ethReply.serialize())));
+    }
+
+    private class InternalPacketProcessor implements PacketProcessor {
+
+        @Override
+        public void process(PacketContext context) {
+            if (context.isHandled()) {
+                return;
+            } else if (!gatewayService.getGatewayDeviceIds().contains(
+                    context.inPacket().receivedFrom().deviceId())) {
+                // return if the packet is not from gateway nodes
+                return;
+            }
+
+            InboundPacket pkt = context.inPacket();
+            Ethernet ethernet = pkt.parsed();
+            if (ethernet != null &&
+                    ethernet.getEtherType() == Ethernet.TYPE_ARP) {
+                executorService.execute(() -> processArpPacket(context, ethernet));
+            }
+        }
+    }
+
+    // TODO make a cache for the MAC, not a good idea to REST call every time it gets ARP request
+    private MacAddress getTargetMacForTargetIp(Ip4Address targetIp) {
+        OpenstackPort port = openstackService.ports().stream()
+                .filter(p -> p.deviceOwner().equals(DEVICE_OWNER_ROUTER_GATEWAY) ||
+                        p.deviceOwner().equals(DEVICE_OWNER_FLOATING_IP))
+                .filter(p -> p.fixedIps().containsValue(targetIp.getIp4Address()))
+                .findAny().orElse(null);
+
+        return port == null ? MacAddress.NONE : port.macAddress();
+    }
+}