Recent advancements in Multi-Protocol Label Switching (MPLS) based technology has brought transformation in next generation computer networking by enhancing Traffic Engineering (TE) features and Quality of Service (QoS) service parameters. Nowadays traffic management is successfully controlled by MPLS technology especially in case of underutilized or over-utilized links. The main dissimilarity between Internet Protocol (IP) and MPLS lies in the complexity of routing or switching look-up tables that seem to be less complex in latter type of networks.MPLS network tunneling is relied on a QoS routing algorithm thereby establishing a bandwidth guaranteed and less delay paths from source to destination. In this paper, a hybrid algorithm named Hybrid MPLS Tunneling Algorithm (HMTA)
which comprises of bandwidth and delay differentiation techniques as well as on the basis of priority bits contained in each data packet is proposed which improves QoS routing of MPLS networks.In proposed algorithm, the differentiation of links is based on the threshold values of bandwidth and delaywhich is also named as the link state information. The link differentiation is done to reduce the blocking probability and number of times QoS state exchangestake place resulting in increment of QoS overheads. In order to improve the performance, this new approach is using high priority bits to accurately transmit the data-labeled or content-labeled packets to its destination by using the simulation tool MATLAB to perform the experiments. Finally, the simulation experiments demonstrate that proposed approach results in less blocking probability, high utilized bandwidth, lower packet loss, high network utilization with minimal delay.