VPC peering allows two separate virtual networks (VPCs) to connect privately. First, both VPCs are created. Then, one VPC sends a peering request to the other. The second VPC must accept this request. Once accepted, the peering connection becomes active. However, to enable communication, route tables in both VPCs need to be updated to include routes pointing to the other VPC. Only after these updates can traffic flow between the VPCs. If route tables are not updated, even an active peering connection will not allow traffic. This process works for VPCs in the same or different AWS accounts.