How VPN Works: A Guide to Virtual Private Networks

What Is a VPN?

A Virtual Private Network (VPN) is a technology that creates secure, encrypted connections over public networks to protect data transmission and user privacy.

Recent attacks targeting Ivanti VPN appliances through the CVE-2025-22457 vulnerability show that understanding VPN architecture has become critical for cybersecurity professionals.

A VPN connection combines three key characteristics:

• Virtual – Your device accesses remote networks without requiring dedicated hardware or direct physical connections
• Private – Strong encryption protocols prevent unauthorized parties from accessing or monitoring your communications
• Networked – The system relies on coordinated communication between your device, VPN servers, and target destinations to route traffic securely

When you connect to a VPN, your internet traffic is routed through an encrypted tunnel to the VPN server before reaching its final destination, effectively masking your real IP address and location.

How Does a VPN Work?

A VPN works by creating a secure tunnel on top of existing internet infrastructure. Your device becomes part of a remote network as if physically connected to it, while your actual internet traffic is encapsulated and encrypted before transmission. The VPN server acts as your internet gateway, making websites and services see the server’s location and IP address instead of yours.

Here’s how a VPN establishes secure connections:

1. Initial Authentication and Handshake

When a user attempts to connect to a VPN server, the client software initiates contact with the VPN gateway through an IKEv2/IPsec or TLS handshake.

The system presents user credentials for verification through various authentication methods including username/password combinations, digital certificates, smart cards, MFA tokens, and biometric verification. The system also verifies device compliance and checks for security updates during this initial phase.

2. Key Exchange and Tunnel Establishment

After successful authentication, both sides generate a shared session key using protocols like Internet Key Exchange (IKE) for IPsec VPNs or TLS handshakes for SSL VPNs. Only the encrypted packets that follow can unlock this key.

This phase establishes cryptographic keys for encrypting subsequent traffic and configures tunnel parameters. The gateway assigns an internal IP address and pushes routes so that all (or selected) traffic is funneled through the tunnel.

3. Secure Data Transmission and Transit

Once the tunnel is active, all user traffic is encapsulated within encrypted packets before transmission across public networks. Each packet is wrapped, encrypted using algorithms like AES-256 or ChaCha20-Poly1305, and integrity-checked before leaving your device. Anyone intercepting the traffic sees only ciphertext. The VPN protocol handles encryption, integrity verification, and secure delivery to the destination server.

4. Packet Processing and Forwarding

The VPN gateway decrypts incoming packets, inspects them against security policies, and forwards legitimate traffic to the target server. The return path follows the same encrypted process in reverse, ensuring bidirectional security throughout the communication session.

5. Connection Monitoring and Maintenance

VPN systems continuously monitor connection health, detect network changes that might affect security, implement keep-alive mechanisms to maintain stable connections, and log security events for analysis and compliance purposes.

Understanding this process helps security teams identify three critical vulnerability areas:

• Blind spots: Stolen VPN credentials mean an attacker inside your network with a legitimate IP
• Patch debt: Unpatched gateways (e.g., recent Ivanti and Fortinet CVEs) are popular initial-access vectors
• Split tunneling leaks: Misconfigurations can let sensitive data leave outside the tunnel

However, VPNs also introduce security risks that your organization must address through comprehensive monitoring and advanced threat detection.

Understanding legal evidence collection and investigation processes is important when VPN security incidents occur. Learn more about digital evidence handling and compliance requirements in Group-IB’s guide to e-discovery.

The Core Components of a VPN

The core components of a VPN include client software, servers and gateways, authentication systems, encryption engines, and network infrastructure. These components work together to establish secure remote connections.

Understanding how VPN works requires examining each component’s role in maintaining both security and performance.

1. VPN Client Software

A VPN client software is the interface between users and its infrastructure. Most VPN clients today handle authentication, connection management, and local security policies while automatically establishing secure tunnels and managing encryption keys. Enterprise VPN clients integrate with existing Identity and Access Management (IAM) systems, supporting features like automatic reconnection and split tunneling.

1. VPN Servers and Gateways

VPN servers and gateways are what make the VPN infrastructure. They handle incoming connections, authentication, and traffic routing. These servers maintain encryption keys, enforce security policies, and provide the exit point for VPN traffic while integrating with firewalls and other security appliances for comprehensive network protection.

2. Authentication Systems

Authentication systems verify user identity before granting VPN access. These systems support Multi-Factor Authentication (MFA), certificate-based authentication, and integration with Active Directory (AD) or Lightweight Directory Access Protocol (LDAP) systems. Authentication and authorization failures remain the one of the most exploited VPN vulnerabilities, which is why proper configurations here are essential.

3. Encryption Engines

Encryption engines handle the cryptographic operations that secure VPN traffic. These components implement encryption algorithms such as AES or XChaCha20, manage key exchanges, and maintain data integrity throughout transmission.

4. Network Infrastructure

Network Infrastructure includes the underlying routers, switches, and internet connections that carry VPN traffic. Proper network configuration maintains optimal connection performance while maintaining security boundaries between VPN traffic and other network communications.

Encryption Protocols Used in VPNs

How VPN works depends on the encryption protocols used. VPNs use three primary encryption protocols: IPsec, OpenVPN, and WireGuard. Each of these protocols differ in how they secure data transmission and network connectivity. They vary in their implementation methods, security features, and suitability for different enterprise environments and use cases.

1. Internet Protocol Security (IPsec)

IPsec is the most widely deployed VPN protocol in enterprise environments, operating at the network layer to provide transparent security for all applications.

It offers transport mode that encrypts only the data payload for host-to-host communications, and tunnel mode that encrypts the entire IP packet for site-to-site VPN connections. IPsec supports various encryption algorithms, including AES-256, for strong security of sensitive data transmission.

2. OpenVPN

OpenVPN builds on SSL/TLS protocols to create secure point-to-point connections with extensive customization capabilities due to its open-source nature. It provides excellent firewall traversal capabilities and offers flexible authentication options, such as certificates, smart cards, and two-factor authentication. Recent vulnerabilities like CVE-2025-2704 highlight the importance of keeping VPN software updated to prevent security breaches.

3. WireGuard

WireGuard uses ChaCha20-Poly1305 exclusively and is one of the newer VPN protocol designs, known for its simplicity and performance through state-of-the-art cryptography with fixed algorithm choices. This eliminates configuration complexity and reduces attack surface while providing a streamlined codebase that makes security auditing more manageable compared to older protocols.

Secure development practices help prevent VPN vulnerabilities. Learn more about integrating security throughout development in Group-IB’s guide to Secure Software Development Lifecycle.

Types of VPNs

The main types of VPNs include site-to-site, remote access, cloud, Zero Trust Network Access (ZTNA), and mobile VPNs. How VPN works varies significantly across these five deployment models, each optimized for different connectivity requirements and security models.

1. Site-to-Site VPNs

These VPNs connect networks across geographical locations, creating secure bridges between office locations, data centers, and cloud environments. They operate at the network level, requiring minimal configuration on individual devices while providing transparent connectivity for all network services.

2. Remote Access VPNs

Remote Access VPNs allow individual users to securely connect to corporate networks from any location. It supports the remote workforce by providing encrypted access to internal applications, file servers, and other network resources. 93% of organizations rely on VPNs for remote work, making this a critical deployment for business continuity.

3. Cloud VPNs

Cloud VPNs utilize the cloud infrastructure to provide scalable, on-demand VPN services. These solutions offer rapid deployment, elastic scaling to accommodate changing user populations, integration with cloud identity services, and reduced infrastructure management overhead.

4. Zero Trust Network Access (ZTNA)

ZTNA provides application-specific access based on user identity, device posture, and contextual factors rather than broad network access. This approach limits access to specific applications rather than entire network segments.

5. Mobile VPNs

Mobile VPNs address the unique challenges of securing connections from mobile devices that frequently change networks. These solutions keep transitions between cellular, WiFi, and other connection types seamless while maintaining security and performance.

How Businesses Use VPNs for Network Security

Businesses use VPNs for four primary purposes: secure remote work infrastructure, multi-site connectivity, third-party access control, and regulatory compliance. We’ll explore these use cases below.

1. Secure Remote Work Infrastructure

Over 40% of US companies adopted VPNs in 2024, enabling employee access to their company’s internal applications, databases, and file servers from any location while ensuring that sensitive corporate data remains protected during transmission across public networks.

2. Multi-Site Connectivity

This use case allows businesses to create secure networks spanning multiple physical locations. Site-to-site VPNs enable seamless sharing of resources between headquarters, branch offices, and data centers without exposing internal traffic to internet-based threats.

3. Third-Party and Partner Access

Third-party and partner access provides controlled connectivity for external vendors, contractors, and business partners who need limited access to specific corporate resources. 92% of enterprises are concerned about third parties with VPN access serving as potential backdoors, highlighting the need for better access controls.

4. Compliance and Regulatory Requirements

Compliance and regulatory requirements in industries like healthcare, finance, and government often mandate secure communication channels for sensitive data transmission. VPNs help organizations meet regulatory standards by providing encryption and access controls required by frameworks like HIPAA, PCI DSS, and SOX.

However, businesses face significant security challenges. A recent research from Zscaler shows that ransomware (42%), malware (35%), and DDoS attacks (30%) represent the top threats exploiting VPN vulnerabilities.

Among enterprises breached via VPN vulnerabilities, 53% reported that threat actors moved laterally within their networks, demonstrating containment failures at the initial point of compromise.

Case Study: A Malaysian healthcare provider used Group-IB’s Attack Surface Management to block 2,872 malicious threats after VPN credential compromise, enabling rapid threat detection and response.

Group-IB’s Managed XDR solution enhances VPN security by providing comprehensive threat detection across all VPN traffic, identifying anomalous behaviors that might indicate compromise, and enabling rapid response to security incidents.

What Should a Good VPN Do?

A good VPN must continuously deliver comprehensive cybersecurity capabilities while maintaining the performance and reliability required for modern business operations.

1. Strong Encryption and Protocol Support

An enterprise-grade VPN should implement AES-256 encryption as a minimum standard, support multiple protocols including IPsec, OpenVPN, and modern alternatives like WireGuard. It should also provide perfect forward secrecy to protect past communications even if current keys are compromised, and enable cipher suite negotiation to ensure optimal security configurations.

2. Comprehensive Authentication and Access Control

This ensures that only authorized users can access VPN resources. Effective VPNs should be able to integrate with existing identity management systems like Active Directory, support multi-factor authentication including hardware tokens and biometric verification, implement role-based access controls to limit user permissions, and provide certificate-based authentication for enhanced security.

3. Network Performance and Reliability

A good VPN solution offers optimized routing to minimize latency, load balancing across multiple servers for high availability, bandwidth management to prioritize critical traffic, and automatic failover mechanisms to maintain connectivity during outages.

4. Monitoring and Logging Capabilities

Visibility into VPN usage and security events is also expected of a good VPN solution. Enterprise VPNs should generate detailed connection logs for compliance and security analysis, monitor for suspicious activities and potential security breaches, integrate with Security Information and Event Management (SIEM) systems, and provide real-time alerting for security incidents.

5. Endpoint Security Integration

This feature ensures that devices connecting through VPNs meet security standards. Advanced solutions verify endpoint compliance before allowing connections, deploy endpoint detection and response capabilities, implement device trust verification, and support bring-your-own-device (BYOD) policies with appropriate security controls.

You can check if your VPN is working properly by verifying your public IP address using online tools and running DNS leak tests to confirm traffic routes through the encrypted tunnel.

Organizations should regularly conduct security assessments of their VPN infrastructure. Group-IB’s Security Assessment services help identify VPN vulnerabilities, test authentication mechanisms, and evaluate encryption implementations.

Group-IB’s Role in VPN Traffic Analysis and Threat Detection

VPN infrastructures are vulnerable to cyber attacks that traditional perimeter tools overlook. Attackers can exploit these vulnerabilities to gain unauthorized network access and move laterally through enterprise environments.

Group-IB addresses these challenges through an approach that combines real-time monitoring with proactive assessments:

• Real-time threat detection: Group-IB’s Managed XDR solution provides comprehensive monitoring of VPN-related activities through behavioral monitoring and enriches them with threat intelligence. The platform correlates VPN connection data with endpoint data and threat intelligence to identify suspicious activities such as unusual login patterns or lateral movement before they escalate into breaches.
• Proactive vulnerability assessment: Group-IB’s Security Assessment services complement VPN monitoring by identifying configuration vulnerabilities and rigorously testing authentication mechanisms. These assessments help to ensure that your remote access infrastructure, including VPNs, align with enterprise security standards and best practices.

The combined approach enables security teams to detect threats early, investigate suspicious VPN activities, and respond to incidents with detailed forensic capabilities while maintaining operational efficiency for legitimate users.

Get in touch with our experts today to discover how Group-IB’s integrated approach to threat detection and response can enhance your VPN security posture and protect your organization from emerging threats.