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This paper presents the technology and laboratory testing of an embedded system that enables inter-vehicular communication for real-time route guidance (RG). Specifically, it presents a developed prototype for testbed deployment of the vehicle-to-vehicle-based RG algorithm by Hawas and El-Sayed. For efficient communication and to prevent data overflow, the RG algorithm only allows message exchange among vehicles within the so-called geo-fence regions, which are in the vicinity of the urban network intersections. The utilization of exchanged data among vehicles for real-time navigation and best route finding follows a specific protocol and screening conditions to minimize data overflow and communication requirements. This paper reviews the detailed procedure and the mathematical formulations of the RG algorithm. Detailed functional analysis was performed on the system, and technical requirements were subsequently identified. Based on these requirements, the on-board units were designed, and the functionality was validated with different test cases. To further investigate the performance of the RG algorithm in the real world, different laboratory scenarios were formed to emulate various field conditions. The description of each scenario and the results are discussed in detail.