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A virtual circuit is a pathway through a switched, mesh-type network that appears to be a dedicated, physically connected circuit. The virtual circuit is predefined and maintained by the end systems and nodes along the circuit, but the actual pathway through the packet-switched network may change due to routing around downed or busy connections. The important point is that packets are transferred in order over a specific path and arrive at the destination in order.

A PVC is a fixed circuit that is defined in advance by a public network carrier (or a network manager on an internal network). The permanence of the line removes the setup overhead and improves performance. A PVC is used on a circuit that includes routers that must maintain a constant connection in order to transfer routing information in a dynamic network environment. Carriers assign PVCs to customers to reduce overhead and improve performance on their networks.

In contrast, an SVC (switched virtual circuit) establishes a temporary virtual circuit between individual workstations, with sessions lasting only as long as needed. Once a communication session is complete, the virtual circuit is disabled. See "Virtual Circuit" for more information.

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