A loop detection system and method operable in an Ethernet network having a provider network and a customer network. In one embodiment, a provider edge (PE) entity is operable to generate a test frame with at least one of a destination address (DA) and source address (SA) that is unknown to the customer network. The test frame is broadcast to the customer network coupled to the PE entity. Upon determining that the test frame or its duplicates are received back by the PE entity within a first time period, loop location within the Network is deduced responsive to the determination.