A technique for configuring a pseudowire involves extending the functionality of the Dynamic Host Configuration Protocol (DHCP). In an embodiment, pseudowire configuration information is embedded into DHCP messages that are communicated between a customer edge (CE) device and a provider edge (PE) device and used to configure a pseudowire between the two devices. The pseudowire configuration information may include an indication of the pseudowire capabilities of the CE device, the types of pseudowires desired by the CE device, the types of pseudowire encapsulations supported by the CE device, the types of pseudowires that are to be configured, the pseudowire encapsulations that are to be used, and pseudowire labels. Pseudowire configuration information can be embedded into the options field of a DHCP message using a new option, using multiple new options, or by overloading an existing option.