In order to fully realize the potential of Cloud and High Performance Computing (HPC) applications, significant improvement is required in the cost/performance of datacenter networks. While recent industry standards such as Quantized Congestion Notification (QCN) for Converged Enhanced Ethernet (CEE) have begun to address this issue, there are still significant problems left open. Therefore we propose two novel source-based adaptive routing schemes for CEE-based networks. First, we develop a basic source-driven Reactive Route Control (R2C2) adaptive routing scheme. In response to congestion notifications, the source activates additional paths to re-route traffic around potential congestion points. Using industry standard VLANs, a source node can effectively control the path choices in the network. This approach goes beyond conventional QCN limitations by replacing its reaction point with a VLAN-based multipath route controller. We thus enable HPC/Cloud applications demanding direct and/or secure access to the network features. Second, we combine R2C2 with the QCN reaction point, resulting in the higher performance Reactive Route & Rate Controller (R 3C2). In case of persistent or multiple hotspots when VLAN route selection alone is insufficient, the R3C2 source will throttle its packet injection rates individually along each congested route of a multipath bundle. Detailed simulations against established datacenter and HPC benchmarks show the practical benefits in performance and stability. © 2010 IEEE.