A method, system and computer program product for selecting an optimal transport protocol in a cloud computing environment. An application creates a socket to communicate with a destination Virtual Machine (VM). The application requests a daemon agent to query a virtual machine manager to determine if the destination VM is on the same hypervisor as the application. The daemon agent receives a VMCI address (“context ID”) and an indication of the hypervisor associated with the destination VM from the virtual machine manager. The daemon agent enables the transport layer to route traffic over the VMCI protocol to the destination VM using its context ID in response to the destination VM being on the same hypervisor as the application. In this manner, the application is able to route traffic using an optimal transport protocol, including VMCI, depending on peer hypervisor association without requiring any code modifications to the application.