diff --git a/apps/cordvtn/src/main/java/org/onosproject/cordvtn/impl/CordVtnInstanceManager.java b/apps/cordvtn/src/main/java/org/onosproject/cordvtn/impl/CordVtnInstanceManager.java
new file mode 100644
index 0000000..4b85c27
--- /dev/null
+++ b/apps/cordvtn/src/main/java/org/onosproject/cordvtn/impl/CordVtnInstanceManager.java
@@ -0,0 +1,428 @@
+/*
+ * Copyright 2015-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.cordvtn.impl;
+
+import com.google.common.collect.Lists;
+import com.google.common.collect.Sets;
+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.apache.felix.scr.annotations.Service;
+import org.onlab.packet.Ethernet;
+import org.onlab.packet.Ip4Address;
+import org.onlab.packet.IpAddress;
+import org.onlab.packet.MacAddress;
+import org.onlab.packet.VlanId;
+import org.onosproject.cordvtn.api.CordVtnConfig;
+import org.onosproject.cordvtn.api.CordVtnService;
+import org.onosproject.cordvtn.api.Instance;
+import org.onosproject.core.ApplicationId;
+import org.onosproject.core.CoreService;
+import org.onosproject.dhcp.DhcpService;
+import org.onosproject.mastership.MastershipService;
+import org.onosproject.net.ConnectPoint;
+import org.onosproject.net.DefaultAnnotations;
+import org.onosproject.net.Host;
+import org.onosproject.net.HostId;
+import org.onosproject.net.HostLocation;
+import org.onosproject.net.Port;
+import org.onosproject.net.config.ConfigFactory;
+import org.onosproject.net.config.NetworkConfigEvent;
+import org.onosproject.net.config.NetworkConfigListener;
+import org.onosproject.net.config.NetworkConfigRegistry;
+import org.onosproject.net.config.basics.SubjectFactories;
+import org.onosproject.net.device.DeviceService;
+import org.onosproject.net.host.DefaultHostDescription;
+import org.onosproject.net.host.HostDescription;
+import org.onosproject.net.host.HostEvent;
+import org.onosproject.net.host.HostListener;
+import org.onosproject.net.host.HostProvider;
+import org.onosproject.net.host.HostProviderRegistry;
+import org.onosproject.net.host.HostProviderService;
+import org.onosproject.net.host.HostService;
+import org.onosproject.net.packet.PacketContext;
+import org.onosproject.net.packet.PacketProcessor;
+import org.onosproject.net.packet.PacketService;
+import org.onosproject.net.provider.AbstractProvider;
+import org.onosproject.net.provider.ProviderId;
+import org.onosproject.xosclient.api.OpenStackAccess;
+import org.onosproject.xosclient.api.VtnPort;
+import org.onosproject.xosclient.api.VtnPortApi;
+import org.onosproject.xosclient.api.VtnService;
+import org.onosproject.xosclient.api.VtnServiceApi;
+import org.onosproject.xosclient.api.VtnServiceId;
+import org.onosproject.xosclient.api.XosAccess;
+import org.onosproject.xosclient.api.XosClientService;
+import org.slf4j.Logger;
+
+import java.util.List;
+import java.util.Map;
+import java.util.Objects;
+import java.util.Set;
+import java.util.concurrent.ExecutorService;
+import java.util.stream.Collectors;
+import java.util.stream.StreamSupport;
+
+import static com.google.common.base.Preconditions.checkNotNull;
+import static java.util.concurrent.Executors.newSingleThreadScheduledExecutor;
+import static org.onlab.util.Tools.groupedThreads;
+import static org.onosproject.cordvtn.api.Instance.*;
+import static org.onosproject.xosclient.api.VtnService.NetworkType.PRIVATE;
+import static org.slf4j.LoggerFactory.getLogger;
+
+/**
+ * Adds or removes instances to network services.
+ */
+@Component(immediate = true)
+@Service(value = CordVtnInstanceManager.class)
+public class CordVtnInstanceManager extends AbstractProvider implements HostProvider {
+
+    protected final Logger log = getLogger(getClass());
+
+    private static final String XOS_ACCESS_ERROR = "XOS access is not configured";
+    private static final String OPENSTACK_ACCESS_ERROR = "OpenStack access is not configured";
+    private static final Ip4Address DEFAULT_DNS = Ip4Address.valueOf("8.8.8.8");
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected CoreService coreService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected NetworkConfigRegistry configRegistry;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected HostProviderRegistry hostProviderRegistry;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected DeviceService deviceService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected HostService hostService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected PacketService packetService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected DhcpService dhcpService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected MastershipService mastershipService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected XosClientService xosClient;
+
+    private final ConfigFactory configFactory =
+            new ConfigFactory(SubjectFactories.APP_SUBJECT_FACTORY, CordVtnConfig.class, "cordvtn") {
+                @Override
+                public CordVtnConfig createConfig() {
+                    return new CordVtnConfig();
+                }
+            };
+
+    private final ExecutorService eventExecutor =
+            newSingleThreadScheduledExecutor(groupedThreads("onos/cordvtn-instance", "event-handler"));
+    private final PacketProcessor packetProcessor = new InternalPacketProcessor();
+    private final HostListener hostListener = new InternalHostListener();
+    private final NetworkConfigListener configListener = new InternalConfigListener();
+
+    private ApplicationId appId;
+    private HostProviderService hostProvider;
+    private CordVtnArpProxy arpProxy; // TODO make it a component service
+    private MacAddress privateGatewayMac = MacAddress.NONE;
+    private XosAccess xosAccess = null;
+    private OpenStackAccess osAccess = null;
+
+    /**
+     * Creates an cordvtn host location provider.
+     */
+    public CordVtnInstanceManager() {
+        super(new ProviderId("host", CordVtnService.CORDVTN_APP_ID));
+    }
+
+    @Activate
+    protected void activate() {
+        appId = coreService.registerApplication(CordVtnService.CORDVTN_APP_ID);
+
+        arpProxy = new CordVtnArpProxy(appId, packetService, hostService);
+        packetService.addProcessor(packetProcessor, PacketProcessor.director(0));
+        arpProxy.requestPacket();
+
+        hostService.addListener(hostListener);
+        hostProvider = hostProviderRegistry.register(this);
+
+        configRegistry.registerConfigFactory(configFactory);
+        configRegistry.addListener(configListener);
+
+        log.info("Started");
+    }
+
+    @Deactivate
+    protected void deactivate() {
+        hostProviderRegistry.unregister(this);
+        hostService.removeListener(hostListener);
+
+        packetService.removeProcessor(packetProcessor);
+
+        configRegistry.unregisterConfigFactory(configFactory);
+        configRegistry.removeListener(configListener);
+
+        eventExecutor.shutdown();
+        log.info("Stopped");
+    }
+
+    @Override
+    public void triggerProbe(Host host) {
+        /*
+         * Note: In CORD deployment, we assume that all hosts are configured.
+         * Therefore no probe is required.
+         */
+    }
+
+    /**
+     * Adds a service instance at a given connect point.
+     *
+     * @param connectPoint connect point of the instance
+     */
+    public void addInstance(ConnectPoint connectPoint) {
+        Port port = deviceService.getPort(connectPoint.deviceId(), connectPoint.port());
+        if (port == null) {
+            log.debug("No port found from {}", connectPoint);
+            return;
+        }
+
+        VtnPort vtnPort = getVtnPort(port.annotations().value("portName"));
+        if (vtnPort == null) {
+            return;
+        }
+
+        VtnService vtnService = getVtnService(vtnPort.serviceId());
+        if (vtnService == null) {
+            return;
+        }
+
+        // Added CREATE_TIME intentionally to trigger HOST_UPDATED event for the
+        // existing instances.
+        DefaultAnnotations.Builder annotations = DefaultAnnotations.builder()
+                .set(SERVICE_TYPE, vtnService.serviceType().toString())
+                .set(SERVICE_ID, vtnPort.serviceId().id())
+                .set(PORT_ID, vtnPort.id().id())
+                .set(CREATE_TIME, String.valueOf(System.currentTimeMillis()));
+
+        HostDescription hostDesc = new DefaultHostDescription(
+                vtnPort.mac(),
+                VlanId.NONE,
+                new HostLocation(connectPoint, System.currentTimeMillis()),
+                Sets.newHashSet(vtnPort.ip()),
+                annotations.build());
+
+        HostId hostId = HostId.hostId(vtnPort.mac());
+        hostProvider.hostDetected(hostId, hostDesc, false);
+    }
+
+    /**
+     * Adds a service instance with given host ID and host description.
+     *
+     * @param hostId host id
+     * @param description host description
+     */
+    public void addInstance(HostId hostId, HostDescription description) {
+        hostProvider.hostDetected(hostId, description, false);
+    }
+
+    /**
+     * Removes a service instance from a given connect point.
+     *
+     * @param connectPoint connect point
+     */
+    public void removeInstance(ConnectPoint connectPoint) {
+        hostService.getConnectedHosts(connectPoint)
+                .stream()
+                .forEach(host -> hostProvider.hostVanished(host.id()));
+    }
+
+    /**
+     * Removes service instance with given host ID.
+     *
+     * @param hostId host id
+     */
+    public void removeInstance(HostId hostId) {
+        hostProvider.hostVanished(hostId);
+    }
+
+    private void instanceDetected(Instance instance) {
+        VtnService service = getVtnService(instance.serviceId());
+        if (service == null) {
+            return;
+        }
+
+        if (service.networkType().equals(PRIVATE)) {
+            arpProxy.addGateway(service.serviceIp(), privateGatewayMac);
+            arpProxy.sendGratuitousArpForGateway(service.serviceIp(), Sets.newHashSet(instance));
+        }
+
+        if (!instance.isNestedInstance()) {
+            registerDhcpLease(instance, service);
+        }
+    }
+
+    private void instanceRemoved(Instance instance) {
+        VtnService service = getVtnService(instance.serviceId());
+        if (service == null) {
+            return;
+        }
+
+        if (service.networkType().equals(PRIVATE) && getInstances(service.id()).isEmpty()) {
+            arpProxy.removeGateway(service.serviceIp());
+        }
+
+        if (!instance.isNestedInstance()) {
+            dhcpService.removeStaticMapping(instance.mac());
+        }
+    }
+
+    private void registerDhcpLease(Instance instance, VtnService service) {
+        List<Ip4Address> options = Lists.newArrayList();
+        options.add(Ip4Address.makeMaskPrefix(service.subnet().prefixLength()));
+        options.add(service.serviceIp().getIp4Address());
+        options.add(service.serviceIp().getIp4Address());
+        options.add(DEFAULT_DNS);
+
+        log.debug("Set static DHCP mapping for {} {}", instance.mac(), instance.ipAddress());
+        dhcpService.setStaticMapping(instance.mac(),
+                                     instance.ipAddress(),
+                                     true,
+                                     options);
+    }
+
+    private VtnService getVtnService(VtnServiceId serviceId) {
+        checkNotNull(osAccess, OPENSTACK_ACCESS_ERROR);
+        checkNotNull(xosAccess, XOS_ACCESS_ERROR);
+
+        // TODO remove openstack access when XOS provides all information
+        VtnServiceApi serviceApi = xosClient.getClient(xosAccess).vtnService();
+        VtnService service = serviceApi.service(serviceId, osAccess);
+        if (service == null) {
+            log.warn("Failed to get VtnService for {}", serviceId);
+        }
+        return service;
+    }
+
+    private VtnPort getVtnPort(String portName) {
+        checkNotNull(osAccess, OPENSTACK_ACCESS_ERROR);
+        checkNotNull(xosAccess, XOS_ACCESS_ERROR);
+
+        // TODO remove openstack access when XOS provides all information
+        VtnPortApi portApi = xosClient.getClient(xosAccess).vtnPort();
+        VtnPort vtnPort = portApi.vtnPort(portName, osAccess);
+        if (vtnPort == null) {
+            log.warn("Failed to get port information of {}", portName);
+        }
+        return vtnPort;
+    }
+
+    private Set<Instance> getInstances(VtnServiceId serviceId) {
+        return StreamSupport.stream(hostService.getHosts().spliterator(), false)
+                .filter(host -> Objects.equals(
+                        serviceId.id(),
+                        host.annotations().value(Instance.SERVICE_ID)))
+                .map(Instance::of)
+                .collect(Collectors.toSet());
+    }
+
+    private void readConfiguration() {
+        CordVtnConfig config = configRegistry.getConfig(appId, CordVtnConfig.class);
+        if (config == null) {
+            log.debug("No configuration found");
+            return;
+        }
+
+        log.info("Load CORD-VTN configurations");
+
+        xosAccess = config.xosAccess();
+        osAccess = config.openstackAccess();
+        privateGatewayMac = config.privateGatewayMac();
+
+        Map<IpAddress, MacAddress> publicGateways = config.publicGateways();
+        publicGateways.entrySet()
+                .stream()
+                .forEach(entry -> {
+                    arpProxy.addGateway(entry.getKey(), entry.getValue());
+                    log.debug("Added public gateway IP {}, MAC {}",
+                              entry.getKey(), entry.getValue());
+                });
+        // TODO notice gateway MAC change to VMs holds this gateway IP
+    }
+
+    private class InternalHostListener implements HostListener {
+
+        @Override
+        public void event(HostEvent event) {
+            Host host = event.subject();
+            if (!mastershipService.isLocalMaster(host.location().deviceId())) {
+                // do not allow to proceed without mastership
+                return;
+            }
+
+            Instance instance = Instance.of(host);
+            switch (event.type()) {
+                case HOST_UPDATED:
+                case HOST_ADDED:
+                    eventExecutor.execute(() -> instanceDetected(instance));
+                    break;
+                case HOST_REMOVED:
+                    eventExecutor.execute(() -> instanceRemoved(instance));
+                    break;
+                default:
+                    break;
+            }
+        }
+    }
+
+    private class InternalPacketProcessor implements PacketProcessor {
+
+        @Override
+        public void process(PacketContext context) {
+            if (context.isHandled()) {
+                return;
+            }
+            Ethernet ethPacket = context.inPacket().parsed();
+            if (ethPacket == null || ethPacket.getEtherType() != Ethernet.TYPE_ARP) {
+                return;
+            }
+            arpProxy.processArpPacket(context, ethPacket);
+        }
+    }
+
+    private class InternalConfigListener implements NetworkConfigListener {
+
+        @Override
+        public void event(NetworkConfigEvent event) {
+            if (!event.configClass().equals(CordVtnConfig.class)) {
+                return;
+            }
+
+            switch (event.type()) {
+                case CONFIG_ADDED:
+                case CONFIG_UPDATED:
+                    readConfiguration();
+                    break;
+                default:
+                    break;
+            }
+        }
+    }
+}