Layer 2 Tunnelling Protocol is a protocol used to support Virtual Private Networks (VPNs).
From the Cisco technical documentation: "The Layer 2 Tunnel Protocol (L2TP) is an emerging Internet Engineering Task Force (IETF) standard that combines the best features of two existing tunneling protocols: Cisco's Layer 2 Forwarding (L2F) and Microsoft's Point-to-Point Tunneling Protocol (PPTP). L2TP is an extension to the Point-to-Point Protocol (PPP), which is an important component for VPNs. VPNs allow users and telecommuters to connect to their corporate intranets or extranets. VPNs are cost-effective because users can connect to the Internet locally and tunnel back to connect to corporate resources. This not only reduces overhead costs associated with traditional remote access methods, but also improves flexibility and scalability."