diff --git a/config.yaml b/config.yaml
index d49981de..0fa5de43 100644
--- a/config.yaml
+++ b/config.yaml
@@ -142,6 +142,13 @@ options:
       which do not include a neutron-gateway (do not require l3, lbaas or vpnaas
       services) and should only be used in-conjunction with flat or VLAN provider
       networks configurations.
+  dnsmasq-flags:
+    type: string
+    default:
+    description: |
+      Comma-separated list of key=value config flags with the additional
+      dhcp options for neutron dnsmasq. Note, this option is only valid when
+      enable-local-dhcp-and-metadata option is set to True.
   prevent-arp-spoofing:
     type: boolean
     default: true
diff --git a/hooks/neutron_ovs_context.py b/hooks/neutron_ovs_context.py
index 240d6886..d92e6bbf 100644
--- a/hooks/neutron_ovs_context.py
+++ b/hooks/neutron_ovs_context.py
@@ -30,6 +30,7 @@ from charmhelpers.core.host import (
 )
 from charmhelpers.contrib.openstack import context
 from charmhelpers.contrib.openstack.utils import get_host_ip
+from charmhelpers.contrib.openstack.utils import config_flags_parser
 from charmhelpers.contrib.network.ip import get_address_in_network
 from charmhelpers.contrib.openstack.context import (
     OSContextGenerator,
@@ -164,6 +165,7 @@ class DHCPAgentContext(OSContextGenerator):
         # its principal charm.  Thus we can take the 1st (only) element in each
         # list.
         rids = relation_ids('neutron-plugin')
+        ctxt = {}
         if rids:
             rid = rids[0]
             units = related_units(rid)
@@ -173,8 +175,13 @@ class DHCPAgentContext(OSContextGenerator):
                     rid=rid,
                     unit=units[0])
                 if availability_zone:
-                    return {'availability_zone': availability_zone}
-        return {}
+                    ctxt['availability_zone'] = availability_zone
+
+        dnsmasq_flags = config('dnsmasq-flags')
+        if dnsmasq_flags:
+            ctxt['dnsmasq_flags'] = config_flags_parser(dnsmasq_flags)
+
+        return ctxt
 
 
 class L3AgentContext(OSContextGenerator):
diff --git a/hooks/neutron_ovs_utils.py b/hooks/neutron_ovs_utils.py
index 7227c93f..541e6230 100644
--- a/hooks/neutron_ovs_utils.py
+++ b/hooks/neutron_ovs_utils.py
@@ -127,6 +127,7 @@ GIT_PACKAGE_BLACKLIST = [
 VERSION_PACKAGE = 'neutron-common'
 NOVA_CONF_DIR = "/etc/nova"
 NEUTRON_DHCP_AGENT_CONF = "/etc/neutron/dhcp_agent.ini"
+NEUTRON_DNSMASQ_CONF = "/etc/neutron/dnsmasq.conf"
 NEUTRON_CONF_DIR = "/etc/neutron"
 NEUTRON_CONF = '%s/neutron.conf' % NEUTRON_CONF_DIR
 NEUTRON_DEFAULT = '/etc/default/neutron-server'
@@ -191,6 +192,10 @@ DHCP_RESOURCE_MAP = OrderedDict([
         'services': ['neutron-dhcp-agent'],
         'contexts': [neutron_ovs_context.DHCPAgentContext()],
     }),
+    (NEUTRON_DNSMASQ_CONF, {
+        'services': ['neutron-dhcp-agent'],
+        'contexts': [neutron_ovs_context.DHCPAgentContext()],
+    }),
 ])
 DVR_RESOURCE_MAP = OrderedDict([
     (NEUTRON_L3_AGENT_CONF, {
diff --git a/templates/dnsmasq.conf b/templates/dnsmasq.conf
new file mode 100644
index 00000000..9f798b5f
--- /dev/null
+++ b/templates/dnsmasq.conf
@@ -0,0 +1,5 @@
+{% if dnsmasq_flags -%}
+{% for key, value in dnsmasq_flags.iteritems() -%}
+{{ key }} = {{ value }}
+{% endfor -%}
+{% endif -%}
diff --git a/templates/icehouse/dhcp_agent.ini b/templates/icehouse/dhcp_agent.ini
index fe6c7b41..a49feef7 100644
--- a/templates/icehouse/dhcp_agent.ini
+++ b/templates/icehouse/dhcp_agent.ini
@@ -10,6 +10,10 @@ interface_driver = neutron.agent.linux.interface.OVSInterfaceDriver
 dhcp_driver = neutron.agent.linux.dhcp.Dnsmasq
 root_helper = sudo /usr/bin/neutron-rootwrap /etc/neutron/rootwrap.conf
 
+{% if dnsmasq_flags -%}
+dnsmasq_config_file = /etc/neutron/dnsmasq.conf
+{% endif -%}
+
 enable_metadata_network = True
 enable_isolated_metadata = True
 
diff --git a/templates/mitaka/dhcp_agent.ini b/templates/mitaka/dhcp_agent.ini
index 24a1ab41..03eb0598 100644
--- a/templates/mitaka/dhcp_agent.ini
+++ b/templates/mitaka/dhcp_agent.ini
@@ -11,6 +11,10 @@ interface_driver = neutron.agent.linux.interface.OVSInterfaceDriver
 dhcp_driver = neutron.agent.linux.dhcp.Dnsmasq
 root_helper = sudo /usr/bin/neutron-rootwrap /etc/neutron/rootwrap.conf
 
+{% if dnsmasq_flags -%}
+dnsmasq_config_file = /etc/neutron/dnsmasq.conf
+{% endif -%}
+
 enable_metadata_network = True
 enable_isolated_metadata = True
 
diff --git a/unit_tests/test_neutron_ovs_context.py b/unit_tests/test_neutron_ovs_context.py
index f0866385..d2f6632a 100644
--- a/unit_tests/test_neutron_ovs_context.py
+++ b/unit_tests/test_neutron_ovs_context.py
@@ -283,6 +283,24 @@ class DHCPAgentContextTest(CharmTestCase):
             rid='rid1',
             unit='nova-compute/0')
 
+    def test_dnsmasq_flags(self):
+        self.relation_ids.return_value = ['rid1']
+        self.related_units.return_value = ['nova-compute/0']
+        self.relation_get.return_value = None
+        self.test_config.set('dnsmasq-flags', 'dhcp-userclass=set:ipxe,iPXE,'
+                                              'dhcp-match=set:ipxe,175,'
+                                              'server=1.2.3.4')
+        self.assertEqual(
+            context.DHCPAgentContext()(),
+            {
+                'dnsmasq_flags': {
+                    'dhcp-userclass': 'set:ipxe,iPXE',
+                    'dhcp-match': 'set:ipxe,175',
+                    'server': '1.2.3.4',
+                }
+            }
+        )
+
 
 class L3AgentContextTest(CharmTestCase):