Internal DNS: How is DNS provided for VM instances?
Each instance has a metadata server that also acts as a DNS resolver for that instance. DNS lookups are performed for instance names. The metadata server itself stores all DNS information for the local network and queries Google’s public DNS servers for any addresses outside of the local network.
An internal fully qualified domain name (FQDN) for an instance looks like this:
You can always connect from one instance to another using this FQDN. If you want to connect to an instance using, for example, just hostName, you need information from the internal DNS resolver that is provided as part of Compute Engine.