diff --git a/environments/network-environment-v6.j2.yaml b/environments/network-environment-v6.j2.yaml
index 9a4068a38d..4e4e0af62c 100644
--- a/environments/network-environment-v6.j2.yaml
+++ b/environments/network-environment-v6.j2.yaml
@@ -56,6 +56,14 @@ parameter_defaults:
   # Routes to add to host_routes property of the subnets in neutron.
   {{network.name}}Routes: {{network.routes_ipv6|default([])}}
 {%-     endif %}
+{%-     if network.name == 'Tenant' %}
+  # MTU of the underlying physical network. Neutron uses this value to
+  # calculate MTU for all virtual network components. For flat and VLAN
+  # networks, neutron uses this value without modification. For overlay
+  # networks such as VXLAN, neutron automatically subtracts the overlay
+  # protocol overhead from this value.
+  TenantNetPhysnetMtu: {{network.mtu|default('1500')}}
+{%-     endif %}
 {% endfor %}
 {#- FIXME: These global parameters should be defined in a YAML file, e.g. network_data.yaml. #}
   # Define the DNS servers (maximum 2) for the overcloud nodes
diff --git a/environments/network-environment.j2.yaml b/environments/network-environment.j2.yaml
index 012a787c89..fd423f14aa 100644
--- a/environments/network-environment.j2.yaml
+++ b/environments/network-environment.j2.yaml
@@ -54,6 +54,14 @@ parameter_defaults:
   # Routes to add to host_routes property of the subnets in neutron.
   {{network.name}}Routes: {{network.routes|default([])}}
 {%-     endif %}
+{%-     if network.name == 'Tenant' %}
+  # MTU of the underlying physical network. Neutron uses this value to
+  # calculate MTU for all virtual network components. For flat and VLAN
+  # networks, neutron uses this value without modification. For overlay
+  # networks such as VXLAN, neutron automatically subtracts the overlay
+  # protocol overhead from this value.
+  TenantNetPhysnetMtu: {{network.mtu|default('1500')}}
+{%-     endif %}
 {% endfor %}
 {#- FIXME: These global parameters should be defined in a YAML file, e.g. network_data.yaml. #}
   # Define the DNS servers (maximum 2) for the overcloud nodes
diff --git a/puppet/services/neutron-base.yaml b/puppet/services/neutron-base.yaml
index 79d0361d76..9d6e40bbf7 100644
--- a/puppet/services/neutron-base.yaml
+++ b/puppet/services/neutron-base.yaml
@@ -49,6 +49,16 @@ parameters:
         Remove configuration that is not generated by TripleO. Used to avoid
         configuration remnants after upgrades.
   NeutronGlobalPhysnetMtu:
+    type: number
+    default: 0
+    description: |
+        MTU of the underlying physical network. Neutron uses this value to
+        calculate MTU for all virtual network components. For flat and VLAN
+        networks, neutron uses this value without modification. For overlay
+        networks such as VXLAN, neutron automatically subtracts the overlay
+        protocol overhead from this value.
+        (If this is not changed TenantNetPhysnetMtu will be used.)
+  TenantNetPhysnetMtu:
     type: number
     default: 1500
     description: |
@@ -57,6 +67,8 @@ parameters:
         networks, neutron uses this value without modification. For overlay
         networks such as VXLAN, neutron automatically subtracts the overlay
         protocol overhead from this value.
+        (The mtu setting of the Tenant network in network_data.yaml
+        control's this parameter.)
   NeutronDBSyncExtraParams:
     default: ''
     description: |
@@ -125,6 +137,7 @@ conditions:
   dhcp_agents_zero: {equals : [{get_param: NeutronDhcpAgentsPerNetwork}, 0]}
   service_debug_unset: {equals : [{get_param: NeutronDebug}, '']}
   internal_tls_enabled: {equals: [{get_param: EnableInternalTLS}, true]}
+  global_physnet_mtu_unset: {equals: [{get_param: NeutronGlobalPhysnetMtu}, 0]}
 
 outputs:
   role_data:
@@ -155,7 +168,11 @@ outputs:
             neutron::db::database_db_max_retries: -1
             neutron::db::database_max_retries: -1
             neutron::db::sync::db_sync_timeout: {get_param: DatabaseSyncTimeout}
-            neutron::global_physnet_mtu: {get_param: NeutronGlobalPhysnetMtu}
+            neutron::global_physnet_mtu:
+              if:
+              - global_physnet_mtu_unset
+              - {get_param: TenantNetPhysnetMtu}
+              - {get_param: NeutronGlobalPhysnetMtu}
             neutron::db::sync::extra_params: {get_param: NeutronDBSyncExtraParams}
             neutron::vlan_transparent: {get_param: EnableVLANTransparency}
           - if:
diff --git a/releasenotes/notes/set-tenant-net-mtu-as-neutron-global-physnet-mtu-5e3515a97e8e0367.yaml b/releasenotes/notes/set-tenant-net-mtu-as-neutron-global-physnet-mtu-5e3515a97e8e0367.yaml
new file mode 100644
index 0000000000..d7cf6abbdf
--- /dev/null
+++ b/releasenotes/notes/set-tenant-net-mtu-as-neutron-global-physnet-mtu-5e3515a97e8e0367.yaml
@@ -0,0 +1,10 @@
+---
+features:
+  - |
+    The MTU defined for the ``Tenant`` network in network_data is now used to
+    set neutron's ``global_physnet_mtu`` unless the ``NeutronGlobalPhysnetMtu``
+    parameter is used to override the default. (Neutron uses the
+    ``global_physnet_mtu`` value to calculate MTU for all virtual network
+    components. For flat and VLAN networks, neutron uses this value without
+    modification. For overlay networks such as VXLAN, neutron automatically
+    subtracts the overlay protocol overhead from this value.)