With the rising popularity of the Internet there have arisen corresponding requirements for network reliability, efficiency, and service quality. Internet service providers are responding to these developments by critically examining every aspect of their operational environment, looking for opportunities to scale their networks and optimize performance. In this context, traffic engineering has emerged as a major consideration in the design and operation of large public Internet backbone networks. However, the classical Internet interior gateway routing protocols hinder the practical realization of sophisticated traffic engineering policies in legacy IP networks. The advent of multi-protocol label switching (MPLS) offers the prospect to address some of the shortcomings associated with traffic engineering in IP networks. This paper discusses the techniques and practices of traffic engineering in contemporary IP networks, emphasizing the role of MPLS in performance optimization of the public Internet. We also examine the impact of generalized MPLS (GMPLS) on traffic engineering in IP-over-optical networks as the underlying technologies continue to mature.