A service chaining method comprising receiving a source routed data packet, wherein the source routed data packet comprises a destination address and identifies a plurality of next-hops along a service chain path, identifying a next-hop for the source routed data packet using the plurality of next-hops, determining whether the next-hop is source routing capable, setting the destination address of the source routed data packet in accordance with the determination, wherein the destination address is set to the next-hop when the next-hop is source routing capable, and wherein the destination address is set to a next downstream network node that is source routing capable when the next-hop is not source routing capable, and forwarding the source routed data packet to the next-hop.