The emerging cloud services have motivated a fresh look at the design of data center network infrastructure in multiple layers. To transfer the huge amount of data generated by many data intensive applications, data center network has to be fast, scalable and power efficient. To support flexible and efficient sharing in cloud services, service providers deploy a virtualization layer as part of the data center infrastructure. This thesis explores the design and performance analysis of data center network infrastructure in both physical network and virtualization layer. On the physical network design front, we present a hybrid packet/circuit switched network architecture which uses circuit switched optics to augment traditional packet-switched Ethernet in modern data centers. We show that this technique has substantial potential to improve bisection bandwidth and application performance in a cost-effective manner. To push the adoption of optical circuits in real cloud data centers, we further explore and address the circuit control issues in shared data center environments. On the virtualization layer, we present an analytical study on the network performance of virtualized data centers. Using Amazon EC2 as an experiment platform, we quantify the impact of virtualization on network performance in commercial cloud. Our findings provide valuable insights to both cloud users in moving legacy application into cloud and service providers in improving the virtualization infrastructure to support better cloud services.