diff --git a/elements/base/README.rst b/elements/base/README.rst
index 6f8c27ddc..c2a4412cb 100644
--- a/elements/base/README.rst
+++ b/elements/base/README.rst
@@ -6,6 +6,20 @@ This is the base element.
 Almost all users will want to include this in their disk image build,
 as it includes a lot of useful functionality.
 
+The `DIB_CLOUD_INIT_ETC_HOSTS` environment variable can be used to
+customize cloud-init's management of `/etc/hosts`:
+
+ * If the variable is set to something, write that value as
+   cloud-init's manage_etc_hosts.
+
+ * If the variable is set to an empty string, don't create
+   manage_etc_hosts setting (cloud-init will use its default value).
+
+ * If the variable is not set, use "localhost" for now. Later, not
+   setting the variable will mean using cloud-init's default. (To
+   preserve diskimage-builder's current default behavior in the
+   future, set the variable to "localhost" explicitly.)
+
 Notes:
 
  * If you are getting warnings during the build about your locale
diff --git a/elements/base/install.d/10-cloud-init b/elements/base/install.d/10-cloud-init
index d696c1c79..3eea9af9d 100755
--- a/elements/base/install.d/10-cloud-init
+++ b/elements/base/install.d/10-cloud-init
@@ -9,6 +9,15 @@ set -o pipefail
 
 # cloud-init May not actually be installed
 mkdir -p /etc/cloud/cloud.cfg.d
-dd of=/etc/cloud/cloud.cfg.d/10_etc_hosts.cfg << EOF
-manage_etc_hosts: localhost
+
+if [ ! -v DIB_CLOUD_INIT_ETC_HOSTS ]; then
+    echo "WARNING: In the future the default setting for manage_etc_hosts will not be overridden by this element."
+    echo "WARNING: Set DIB_CLOUD_INIT_ETC_HOSTS to 'localhost' to preserve current behavior."
+fi
+
+DIB_CLOUD_INIT_ETC_HOSTS=${DIB_CLOUD_INIT_ETC_HOSTS-localhost}
+if [ -n "$DIB_CLOUD_INIT_ETC_HOSTS" ]; then
+    dd of=/etc/cloud/cloud.cfg.d/10_etc_hosts.cfg << EOF
+manage_etc_hosts: $DIB_CLOUD_INIT_ETC_HOSTS
 EOF
+fi