Which component forwards traffic between guest VMs on the same host?

A vSwitch (virtual switch) forwards traffic between virtual machines (VMs) on the same host, and also between VMs and the physical network. It operates at Layer 2, performing functions similar to a physical switch, such as MAC address learning and frame forwarding. The hypervisor is the software that creates and runs the VMs, but the vSwitch within the hypervisor handles the traffic forwarding. A virtual router provides routing services between different virtual networks or subnets, not direct forwarding between VMs on the same segment. A pNIC (physical Network Interface Card) is the physical hardware that connects the host to the external network; it doesn't directly forward traffic between VMs on the same host.