When you start learning AWS, services like EC2, S3, Lambda, and RDS feel exciting.
But behind almost every real AWS architecture, there is one silent foundation:
Amazon VPC — Virtual Private Cloud
If EC2 is your server, RDS is your database, and ALB is your traffic manager, then VPC is the private network where all these resources live.
In this blog, we will understand:
- What is VPC
- CIDR and subnetting basics
- Public and private subnets
- Route tables
- Internet Gateway
- Security Groups
- VPC Peering
- Step-by-step VPC Peering example
🔗 Resources
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What is AWS VPC?
Amazon VPC stands for Virtual Private Cloud.
A VPC is your own isolated network inside AWS. AWS describes it as a virtual network dedicated to your AWS account where you can define IP ranges, create subnets, configure route tables, attach gateways, and apply security controls.
Think of it like this:
AWS Cloud
└── Your VPC
├── Public Subnet
├── Private Subnet
├── Route Tables
├── Internet Gateway
├── Security Groups
└── EC2 / RDS / Load Balancer
In a traditional data center, you create networks, switches, routers, firewalls, and subnets manually.
In AWS, VPC gives you similar networking control, but in a cloud-native way.
Why VPC is Important
Without a VPC, your cloud architecture has no proper network boundary.
A VPC helps you:
- Isolate your AWS resources
- Control inbound and outbound traffic
- Separate public and private workloads
- Connect multiple AWS services securely
- Build production-ready cloud architecture
- Connect different VPCs using VPC Peering
- Connect AWS with on-premise networks using VPN or Direct Connect
Example:
Public Subnet → Load Balancer / Bastion Host
Private Subnet → Application Server / Database
This separation is one of the most important cloud security practices.
CIDR and Subnetting Basics
Before understanding subnets, you need a little idea about CIDR.
CIDR stands for Classless Inter-Domain Routing.
In simple words, CIDR defines the IP address range of your network.
Example:
10.0.0.0/16
This means your VPC has a large private IP range starting from 10.0.0.0.
The /16 tells how big the network is.
Common examples:
10.0.0.0/16 → Large VPC range
10.0.1.0/24 → Smaller subnet range
10.0.2.0/24 → Another subnet range
Simple way to understand:
VPC CIDR: 10.0.0.0/16
Public Subnet: 10.0.1.0/24
Private Subnet: 10.0.2.0/24
DB Subnet: 10.0.3.0/24
So the VPC is the big network, and subnets are smaller parts inside that network.
What is a Subnet?
A subnet is a smaller IP range inside your VPC.
AWS says a subnet is a range of IP addresses inside your VPC where you can launch resources like EC2 instances. ([AWS Documentation][1])
Example:
VPC: 10.0.0.0/16
Subnet A: 10.0.1.0/24
Subnet B: 10.0.2.0/24
Subnet C: 10.0.3.0/24
Subnets are created inside Availability Zones.
Example:
VPC: 10.0.0.0/16
AZ-1:
└── Public Subnet: 10.0.1.0/24
AZ-2:
└── Private Subnet: 10.0.2.0/24
Public Subnet vs Private Subnet
A subnet becomes public or private based on its route table.
Public Subnet
A public subnet has a route to the internet through an Internet Gateway.
Example route:
Destination: 0.0.0.0/0
Target: Internet Gateway
Public subnet is useful for:
- Load balancer
- Bastion host
- Public EC2 instance
- NAT Gateway
Private Subnet
A private subnet does not have a direct route to the Internet Gateway.
Private subnet is useful for:
- Application servers
- Databases
- Internal services
- Backend workloads
Example:
Private Subnet
└── EC2 App Server
└── RDS Database
In production, databases should usually stay in private subnets.
Route Tables
A route table controls where network traffic goes.
AWS defines a route table as a set of rules, called routes, that decide where traffic from your subnet or gateway is directed. ([AWS Documentation][2])
Example route table:
Destination Target
10.0.0.0/16 local
0.0.0.0/0 igw-xxxxxxxx
Meaning:
10.0.0.0/16 → Traffic inside VPC
0.0.0.0/0 → Traffic to internet through Internet Gateway
Every subnet must be associated with a route table. A subnet can be associated with only one route table at a time, but one route table can be associated with multiple subnets.
Internet Gateway
An Internet Gateway allows communication between your VPC and the internet.
For a subnet to become public, two things are required:
1. Internet Gateway attached to VPC
2. Route table route:
0.0.0.0/0 → Internet Gateway
Architecture:
Internet
↓
Internet Gateway
↓
Public Route Table
↓
Public Subnet
↓
EC2 Instance
Without an Internet Gateway route, your subnet will not be publicly reachable.
Security Groups
A Security Group acts like a virtual firewall for AWS resources.
AWS explains that a security group controls traffic allowed to reach an instance, and only traffic allowed by security group rules can reach that resource.
Security Groups are attached to resources like:
- EC2
- RDS
- Load Balancer
- Lambda inside VPC
Example Security Group rule:
Inbound Rules:
Type Port Source
SSH 22 Your IP
HTTP 80 0.0.0.0/0
HTTPS 443 0.0.0.0/0
Important point:
Security Groups are stateful.
That means if inbound traffic is allowed, response traffic is automatically allowed.
VPC Peering
VPC Peering allows two VPCs to communicate privately using private IP addresses.
Example:
VPC-A: 10.0.0.0/16
VPC-B: 192.168.0.0/16
After VPC Peering:
EC2 in VPC-A can communicate with EC2 in VPC-B privately.
Use cases:
- Connect two application VPCs
- Connect shared services VPC with app VPC
- Connect dev VPC with monitoring VPC
- Connect VPCs across accounts
- Connect VPCs across regions
Important: VPC Peering does not support overlapping CIDR blocks. AWS states that you cannot create a VPC peering connection if the VPCs have matching or overlapping IPv4 or IPv6 CIDR blocks.
Step-by-Step Example: Create VPC Peering
Let’s say we have two VPCs:
VPC-A: 10.0.0.0/16
VPC-B: 192.168.0.0/16
Goal:
EC2 instance in VPC-A should communicate with EC2 instance in VPC-B.
Step 1: Create VPC-A
Go to:
AWS Console → VPC → Create VPC
Create:
Name: VPC-A
CIDR: 10.0.0.0/16
Create subnet:
Name: VPC-A-Private-Subnet
CIDR: 10.0.1.0/24
Step 2: Create VPC-B
Create second VPC:
Name: VPC-B
CIDR: 192.168.0.0/16
Create subnet:
Name: VPC-B-Private-Subnet
CIDR: 192.168.1.0/24
Step 3: Launch EC2 Instances
Launch one EC2 instance in each VPC.
EC2-A → VPC-A → 10.0.1.0/24 subnet
EC2-B → VPC-B → 192.168.1.0/24 subnet
Make sure both instances have private IPs.
Example:
EC2-A Private IP: 10.0.1.10
EC2-B Private IP: 192.168.1.10
Step 4: Create VPC Peering Connection
Go to:
VPC Console → Peering Connections → Create Peering Connection
Fill details:
Name: VPC-A-to-VPC-B
Requester VPC: VPC-A
Accepter VPC: VPC-B
Click:
Create Peering Connection
Step 5: Accept Peering Request
Go to:
VPC → Peering Connections
Select the request.
Click:
Actions → Accept Request
Now the peering connection status should become:
Active
Step 6: Update Route Table of VPC-A
Go to VPC-A route table.
Add route:
Destination: 192.168.0.0/16
Target: VPC Peering Connection
AWS requires route tables on both sides to be updated so private IPv4 traffic can flow between peered VPCs. The destination should be the peer VPC CIDR and the target should be the VPC peering connection. ([AWS Documentation][6])
Step 7: Update Route Table of VPC-B
Go to VPC-B route table.
Add route:
Destination: 10.0.0.0/16
Target: VPC Peering Connection
Now both VPCs know how to reach each other.
Step 8: Update Security Groups
For EC2-A security group, allow traffic from VPC-B:
Type: ICMP / SSH / Custom TCP
Source: 192.168.0.0/16
For EC2-B security group, allow traffic from VPC-A:
Type: ICMP / SSH / Custom TCP
Source: 10.0.0.0/16
For testing ping:
Allow ICMP
For testing SSH:
Allow TCP 22
Step 9: Test Connectivity
Login to EC2-A and ping EC2-B private IP:
ping 192.168.1.10
Or test SSH:
ssh ec2-user@192.168.1.10
If route tables and security groups are correct, communication should work privately.
Final Thoughts
AWS VPC is one of the most important concepts in cloud networking.
If you understand VPC properly, then services like EC2, Load Balancer, RDS, EKS, Lambda networking, VPN, Direct Connect, and Transit Gateway become much easier.
At a high level, remember this:
VPC = Your private network in AWS
Subnet = Smaller network inside VPC
Route Table = Traffic direction rules
Internet Gateway = Internet access
Security Group = Firewall for resources
VPC Peering = Private connection between two VPCs
