diff --git a/src/packet_analysis/protocol/iptunnel/IPTunnel.cc b/src/packet_analysis/protocol/iptunnel/IPTunnel.cc
index f1e44b19a4..4730e13f79 100644
--- a/src/packet_analysis/protocol/iptunnel/IPTunnel.cc
+++ b/src/packet_analysis/protocol/iptunnel/IPTunnel.cc
@@ -172,17 +172,25 @@ bool IPTunnelAnalyzer::ProcessEncapsulatedPacket(double t, const Packet* pkt, ui
 
 std::unique_ptr<Packet> build_inner_packet(Packet* outer_pkt, int* encap_index,
                                            std::shared_ptr<EncapsulationStack> encap_stack,
-                                           uint32_t len, const u_char* data, int link_type,
-                                           BifEnum::Tunnel::Type tunnel_type,
+                                           uint32_t inner_cap_len, const u_char* data,
+                                           int link_type, BifEnum::Tunnel::Type tunnel_type,
                                            const Tag& analyzer_tag)
 	{
 	auto inner_pkt = std::make_unique<Packet>();
 
+	assert(outer_pkt->cap_len >= inner_cap_len);
+	assert(outer_pkt->len >= outer_pkt->cap_len - inner_cap_len);
+
+	// Compute the wire length of the inner packet based on the wire length of
+	// the outer and the difference in cap len's.
+	uint32_t consumed_len = outer_pkt->cap_len - inner_cap_len;
+	uint32_t inner_wire_len = outer_pkt->len - consumed_len;
+
 	pkt_timeval ts;
 	ts.tv_sec = static_cast<time_t>(run_state::current_timestamp);
 	ts.tv_usec = static_cast<suseconds_t>(
 		(run_state::current_timestamp - static_cast<double>(ts.tv_sec)) * 1000000);
-	inner_pkt->Init(link_type, &ts, len, len, data);
+	inner_pkt->Init(link_type, &ts, inner_cap_len, inner_wire_len, data);
 
 	*encap_index = 0;
 	if ( outer_pkt->session )
diff --git a/src/packet_analysis/protocol/iptunnel/IPTunnel.h b/src/packet_analysis/protocol/iptunnel/IPTunnel.h
index cddd981045..ec91ac605e 100644
--- a/src/packet_analysis/protocol/iptunnel/IPTunnel.h
+++ b/src/packet_analysis/protocol/iptunnel/IPTunnel.h
@@ -99,8 +99,8 @@ protected:
  */
 extern std::unique_ptr<Packet> build_inner_packet(Packet* outer_pkt, int* encap_index,
                                                   std::shared_ptr<EncapsulationStack> encap_stack,
-                                                  uint32_t len, const u_char* data, int link_type,
-                                                  BifEnum::Tunnel::Type tunnel_type,
+                                                  uint32_t inner_cap_len, const u_char* data,
+                                                  int link_type, BifEnum::Tunnel::Type tunnel_type,
                                                   const Tag& analyzer_tag);
 
 namespace detail