The current trend of increasing accessibility and reachability of the Internet has resulted in many new services at the application layer. The potential growth of services on the Internet is only restricted by the network technologies that realize the Internet. In particular, layer 3 technologies are conventionally inflexible and do not adapt well to rapid changes in the Internet environment. Service-oriented networks should be more user-focused, which includes providing mechanisms that show value to the network providers, service providers, and clients. The next generation networking technologies must not only excel in performance, but also in flexibility, control, and scalability. This paper introduces a new network architecture called active protocol label switching (APLS), which establishes a foundation offering the same level of performance and scalability as current label-switching architectures lack. All existing label-switching architectures position the label as a shim layer between layers 2 and 3. The major reason behind this is to make the architecture network protocol independent. However, in designing APLS we investigated the merit of a new concept: label switching over IP. Several other new concepts are introduced: virtual label space, micro-instruction architecture, and micro-policy based forwarding. We will also focus on how APLS can be combined with active programmable networks to offer services at an unprecedented level.