A system and method is disclosed for the secure transfer of data by carrier virtual machines between participating physical hosts through a virtual network (VNET) implemented on one or more internal and/or external networks. The method of the invention can provide additional security controls, comprising parameters that may include, but are not limited to, time-to-live (TTL), access control lists (ACLs), usage policies, directory roles, etc. Additionally, access to one or more of a plurality of carrier virtual machine payloads by security groups, individual access, subdivided individual access, and MIME-like subdivision of a VM-encapsulated payload may be controlled, thereby providing the carrier VM the ability to carry many secured payloads. In addition, VM packets, a group of packets, a single VM, or subpackets within a VM between network endpoints, or at a predetermined intermediary network point, may be quarantined to realize further security. Individual or combinations of these functionalities on carrier virtual machines, and by extension, application and/or one or more sets of secure data may be implemented.