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A set of lightpaths that are established a priori defines the virtual topology of a WDM optical network. If a physical link fails, then all lightpaths that are using the failed link also fail and may leave the virtual topology partitioned into more number of sets of nodes. A node belonging to one set cannot communicate with a node in the another set. Also, failure of lightpaths may increase the objective function value. Hence, it may be necessary to alter the existing virtual topology to restore these lightpaths. In general, altering of a virtual topology is called virtual topology reconfiguration. In this paper, a methodology for reconfiguration of virtual topology in the event of a link failure is proposed. The performance of our algorithm is studied based on the results obtained from extensive simulations. Key words: IP-over-WDM networks, Link Failure, Restoration, Virtual Topology Reconfiguration.