What is: IP unnumbered?

IP unnumbered is method that you can use to enable IP processing on a Point to Point interface without assigning an it an IP address to conserve the IP address space.

All you need to do, is to select an interface that you are going to borrow its IP address; preferrably the loopback interface because it is always in the up state ,then use the command IP unnumbered <selected-interface> under the point to point interface.

To summarize:

• This feature helps in conserving IPv4 addresses. Mostly used in dial-up or DSL setups.
• The IP unnumbered command must be used under a point to point interface types.
• The interface which you borrow its IP address must be up.

for more information on configuring IP unnumbered visit understanding IP unnumbered on Cisco Website.