A virtual circuit (VC) is a communications arrangement in which data from a source user may be passed to a destination user over more than one real circuit configuration during a single period of communication, but the switching is hidden from the users.

Switched virtual circuits are generally set up on a per-call basis and are disconnected when the call is terminated; however, a permanent virtual circuit can be established as an option to provide a dedicated link between two facilities.

A switched virtual circuit (SVC) is a virtual circuit that is dynamically established on demand and is torn down when transmission is complete. Plain old telephone service (POTS) and ISDN telephone calls on the PSTN can be regarded as a simple form of switched virtual circuit. SVCs are used in situations where data transmission is sporadic. In ATM terminology, this is known as a switched virtual connection.

A permanent virtual circuit (PVC) is a virtual circuit established for repeated use between the same data terminal equipments (DTE). In a PVC, the long-term association is identical to the data transfer phase of a virtual call . Permanent virtual circuits eliminate the need for repeated call set-up and clearing.

See also: DLCI