diff --git a/apps/routing/src/main/java/org/onosproject/routing/impl/DirectHostManager.java b/apps/routing/src/main/java/org/onosproject/routing/impl/DirectHostManager.java
new file mode 100644
index 0000000..7e0b2ac
--- /dev/null
+++ b/apps/routing/src/main/java/org/onosproject/routing/impl/DirectHostManager.java
@@ -0,0 +1,281 @@
+/*
+ * 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.routing.impl;
+
+import com.google.common.cache.Cache;
+import com.google.common.cache.CacheBuilder;
+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.Modified;
+import org.apache.felix.scr.annotations.Property;
+import org.apache.felix.scr.annotations.Reference;
+import org.apache.felix.scr.annotations.ReferenceCardinality;
+import org.onlab.packet.EthType;
+import org.onlab.packet.Ethernet;
+import org.onlab.packet.IPv4;
+import org.onlab.packet.Ip4Address;
+import org.onlab.packet.IpAddress;
+import org.onlab.packet.MacAddress;
+import org.onlab.packet.VlanId;
+import org.onlab.util.Tools;
+import org.onosproject.cfg.ComponentConfigService;
+import org.onosproject.core.ApplicationId;
+import org.onosproject.core.CoreService;
+import org.onosproject.incubator.net.intf.Interface;
+import org.onosproject.incubator.net.intf.InterfaceService;
+import org.onosproject.net.ConnectPoint;
+import org.onosproject.net.Host;
+import org.onosproject.net.flow.DefaultTrafficSelector;
+import org.onosproject.net.flow.DefaultTrafficTreatment;
+import org.onosproject.net.flow.TrafficSelector;
+import org.onosproject.net.host.HostEvent;
+import org.onosproject.net.host.HostListener;
+import org.onosproject.net.host.HostService;
+import org.onosproject.net.packet.DefaultOutboundPacket;
+import org.onosproject.net.packet.OutboundPacket;
+import org.onosproject.net.packet.PacketContext;
+import org.onosproject.net.packet.PacketPriority;
+import org.onosproject.net.packet.PacketProcessor;
+import org.onosproject.net.packet.PacketService;
+import org.osgi.service.component.ComponentContext;
+import org.slf4j.Logger;
+import org.slf4j.LoggerFactory;
+
+import java.nio.ByteBuffer;
+import java.util.Optional;
+import java.util.Queue;
+import java.util.concurrent.ConcurrentLinkedQueue;
+import java.util.concurrent.TimeUnit;
+
+import static com.google.common.base.Preconditions.checkNotNull;
+
+/**
+ * Reactively handles sending packets to hosts that are directly connected to
+ * router interfaces.
+ */
+@Component(immediate = true, enabled = false)
+public class DirectHostManager {
+
+    private Logger log = LoggerFactory.getLogger(getClass());
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected PacketService packetService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected InterfaceService interfaceService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected HostService hostService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected CoreService coreService;
+
+    @Reference(cardinality = ReferenceCardinality.MANDATORY_UNARY)
+    protected ComponentConfigService componentConfigService;
+
+    private static final boolean DEFAULT_ENABLED = false;
+
+    @Property(name = "enabled", boolValue = DEFAULT_ENABLED,
+            label = "Enable reactive directly-connected host processing")
+    private volatile boolean enabled = DEFAULT_ENABLED;
+
+    private static final String APP_NAME = "org.onosproject.directhost";
+
+    private static final long MAX_QUEUED_PACKETS = 10000;
+    private static final long MAX_QUEUE_DURATION = 2; // seconds
+
+    private ApplicationId appId;
+
+    private InternalPacketProcessor packetProcessor = new InternalPacketProcessor();
+    private InternalHostListener hostListener = new InternalHostListener();
+
+    private Cache<IpAddress, Queue<IPv4>> ipPacketCache = CacheBuilder.newBuilder()
+            .weigher((IpAddress key, Queue<IPv4> value) -> value.size())
+            .maximumWeight(MAX_QUEUED_PACKETS)
+            .expireAfterAccess(MAX_QUEUE_DURATION, TimeUnit.SECONDS)
+            .build();
+
+    @Activate
+    public void activate(ComponentContext context) {
+        componentConfigService.registerProperties(getClass());
+        modified(context);
+
+        appId = coreService.registerApplication(APP_NAME);
+
+        if (enabled) {
+            enable();
+        }
+    }
+
+    @Modified
+    private void modified(ComponentContext context) {
+        Boolean boolEnabled = Tools.isPropertyEnabled(context.getProperties(), "enabled");
+        if (boolEnabled != null) {
+            if (enabled && !boolEnabled) {
+                enabled = false;
+                disable();
+            } else if (!enabled && boolEnabled) {
+                enabled = true;
+                enable();
+            }
+        }
+    }
+
+    private void enable() {
+        hostService.addListener(hostListener);
+        packetService.addProcessor(packetProcessor, PacketProcessor.director(3));
+
+        TrafficSelector selector = DefaultTrafficSelector.builder()
+                .matchEthType(EthType.EtherType.IPV4.ethType().toShort()).build();
+        packetService.requestPackets(selector, PacketPriority.REACTIVE, appId, Optional.empty());
+    }
+
+    private void disable() {
+        packetService.removeProcessor(packetProcessor);
+        hostService.removeListener(hostListener);
+
+        TrafficSelector selector = DefaultTrafficSelector.builder()
+                .matchEthType(EthType.EtherType.IPV4.ethType().toShort()).build();
+        packetService.cancelPackets(selector, PacketPriority.REACTIVE, appId, Optional.empty());
+    }
+
+    @Deactivate
+    public void deactivate() {
+        disable();
+
+        componentConfigService.unregisterProperties(getClass(), false);
+    }
+
+    private void handle(Ethernet eth) {
+        checkNotNull(eth);
+
+        if (!(eth.getEtherType() == EthType.EtherType.IPV4.ethType().toShort())) {
+            return;
+        }
+
+        IPv4 ipv4 = (IPv4) eth.getPayload().clone();
+
+        Ip4Address dstIp = Ip4Address.valueOf(ipv4.getDestinationAddress());
+
+        Interface egressInterface = interfaceService.getMatchingInterface(dstIp);
+
+        if (egressInterface == null) {
+            log.info("No egress interface found for {}", dstIp);
+            return;
+        }
+
+        Optional<Host> host = hostService.getHostsByIp(dstIp).stream()
+                .filter(h -> h.location().equals(egressInterface.connectPoint()))
+                .filter(h -> h.vlan().equals(egressInterface.vlan()))
+                .findAny();
+
+        if (host.isPresent()) {
+            transformAndSend(ipv4, egressInterface, host.get().mac());
+        } else {
+            hostService.startMonitoringIp(dstIp);
+            ipPacketCache.asMap().compute(dstIp, (ip, queue) -> {
+                if (queue == null) {
+                    queue = new ConcurrentLinkedQueue();
+                }
+                queue.add(ipv4);
+                return queue;
+            });
+        }
+    }
+
+    private void transformAndSend(IPv4 ipv4, Interface egressInterface, MacAddress macAddress) {
+
+        Ethernet eth = new Ethernet();
+        eth.setDestinationMACAddress(macAddress);
+        eth.setSourceMACAddress(egressInterface.mac());
+        eth.setEtherType(EthType.EtherType.IPV4.ethType().toShort());
+        eth.setPayload(ipv4);
+        if (!egressInterface.vlan().equals(VlanId.NONE)) {
+            eth.setVlanID(egressInterface.vlan().toShort());
+        }
+
+        ipv4.setTtl((byte) (ipv4.getTtl() - 1));
+        ipv4.setChecksum((short) 0);
+
+        send(eth, egressInterface.connectPoint());
+    }
+
+    private void send(Ethernet eth, ConnectPoint cp) {
+        OutboundPacket packet = new DefaultOutboundPacket(cp.deviceId(),
+                DefaultTrafficTreatment.builder().setOutput(cp.port()).build(), ByteBuffer.wrap(eth.serialize()));
+        packetService.emit(packet);
+    }
+
+    private void sendQueued(IpAddress ipAddress, MacAddress macAddress) {
+        log.debug("Sending queued packets for {} ({})", ipAddress, macAddress);
+        ipPacketCache.asMap().computeIfPresent(ipAddress, (ip, packets) -> {
+            packets.forEach(ipv4 -> {
+                Interface egressInterface = interfaceService.getMatchingInterface(ipAddress);
+
+                if (egressInterface == null) {
+                    log.info("No egress interface found for {}", ipAddress);
+                    return;
+                }
+
+                transformAndSend(ipv4, egressInterface, macAddress);
+            });
+            return null;
+        });
+    }
+
+    private class InternalPacketProcessor implements PacketProcessor {
+
+        @Override
+        public void process(PacketContext context) {
+            if (context.isHandled()) {
+                return;
+            }
+
+            if (interfaceService.getInterfacesByPort(context.inPacket().receivedFrom()).isEmpty()) {
+                // Don't handle packets that don't come from one of our configured interfaces
+                return;
+            }
+
+            Ethernet eth = context.inPacket().parsed();
+            if (eth == null) {
+                return;
+            }
+
+            handle(eth);
+
+            context.block();
+        }
+    }
+
+    private class InternalHostListener implements HostListener {
+        @Override
+        public void event(HostEvent event) {
+            switch (event.type()) {
+            case HOST_ADDED:
+                event.subject().ipAddresses().forEach(ip ->
+                        DirectHostManager.this.sendQueued(ip, event.subject().mac()));
+                break;
+            case HOST_REMOVED:
+            case HOST_UPDATED:
+            case HOST_MOVED:
+            default:
+                break;
+            }
+        }
+    }
+}
diff --git a/apps/vrouter/src/main/java/org/onosproject/vrouter/Vrouter.java b/apps/vrouter/src/main/java/org/onosproject/vrouter/Vrouter.java
index 5558161..f0012db 100644
--- a/apps/vrouter/src/main/java/org/onosproject/vrouter/Vrouter.java
+++ b/apps/vrouter/src/main/java/org/onosproject/vrouter/Vrouter.java
@@ -51,8 +51,10 @@
             .add("org.onosproject.routing.fpm.FpmManager")
             .add("org.onosproject.routing.impl.SingleSwitchFibInstaller")
             .add("org.onosproject.routing.impl.ControlPlaneRedirectManager")
+            .add("org.onosproject.routing.impl.DirectHostManager")
             .build();
 
+
     @Activate
     protected void activate() {
         appId = coreService.registerApplication(APP_NAME);
diff --git a/drivers/default/src/main/java/org/onosproject/driver/pipeline/SoftRouterPipeline.java b/drivers/default/src/main/java/org/onosproject/driver/pipeline/SoftRouterPipeline.java
index 4618bb0..66d0b53 100644
--- a/drivers/default/src/main/java/org/onosproject/driver/pipeline/SoftRouterPipeline.java
+++ b/drivers/default/src/main/java/org/onosproject/driver/pipeline/SoftRouterPipeline.java
@@ -16,6 +16,7 @@
 package org.onosproject.driver.pipeline;
 
 import org.onlab.osgi.ServiceDirectory;
+import org.onlab.packet.EthType;
 import org.onlab.packet.Ethernet;
 import org.onlab.packet.IpPrefix;
 import org.onlab.packet.VlanId;
@@ -23,6 +24,7 @@
 import org.onosproject.core.ApplicationId;
 import org.onosproject.core.CoreService;
 import org.onosproject.net.DeviceId;
+import org.onosproject.net.PortNumber;
 import org.onosproject.net.behaviour.NextGroup;
 import org.onosproject.net.behaviour.Pipeliner;
 import org.onosproject.net.behaviour.PipelinerContext;
@@ -336,6 +338,16 @@
                     + "nextId or Treatment", fwd.selector(), fwd.appId());
             return Collections.emptySet();
         }
+
+        int tableId = FILTER_TABLE;
+
+        // A punt rule for IP traffic should be directed to the FIB table
+        // so that it only takes effect if the packet misses the FIB rules
+        if (fwd.treatment() != null && containsPunt(fwd.treatment()) &&
+                fwd.selector() != null && matchesIp(fwd.selector())) {
+            tableId = FIB_TABLE;
+        }
+
         TrafficTreatment.Builder ttBuilder = DefaultTrafficTreatment.builder();
         if (fwd.treatment() != null) {
             fwd.treatment().immediate().forEach(ins -> ttBuilder.add(ins));
@@ -363,6 +375,7 @@
         FlowRule rule = DefaultFlowRule.builder()
                 .withSelector(fwd.selector())
                 .withTreatment(ttBuilder.build())
+                .forTable(tableId)
                 .makePermanent()
                 .forDevice(deviceId)
                 .fromApp(fwd.appId())
@@ -374,6 +387,17 @@
         return flowrules;
     }
 
+    private boolean containsPunt(TrafficTreatment treatment) {
+        return treatment.immediate().stream()
+                .anyMatch(i -> i.type().equals(Instruction.Type.OUTPUT)
+                        && ((OutputInstruction) i).port().equals(PortNumber.CONTROLLER));
+    }
+
+    private boolean matchesIp(TrafficSelector selector) {
+        EthTypeCriterion c = (EthTypeCriterion) selector.getCriterion(Criterion.Type.ETH_TYPE);
+        return c != null && c.ethType().equals(EthType.EtherType.IPV4.ethType());
+    }
+
     /**
      * SoftRouter has a single specific table - the FIB Table. It emulates
      * LPM matching of dstIP by using higher priority flows for longer prefixes.