Abstract: A tunneling optimization is described in which packets are forwarded from a home agent to a mobile device by co-locating a foreign agent corresponding to a mobile device at the mobile device. When a mobile device acquires a new foreign agent, the mobile device notifies the home agent as to the corresponding foreign agent address. A packet received at the home agent having the mobile device as a packet header destination address is parsed and the foreign agent address is substituted for the mobile device address, and the packet is forwarded to the foreign agent. The foreign agent, upon receiving the packet, removes the foreign agent address and replaces the mobile device address as the packet header destination address. The packet is then forwarded to the mobile device.